Congress is now going after MF Gobal. This summary is from yesterday.
Corzine spoke before the House Agriculture Committee today, and while he did express his distress at the devastation, he added that he could not answer for the confusion that took place after he left the company.
He used a famous Holderism by playing the “I don’t have a clue” card, “Their plight weighs on my mind every day — every hour…I simply do not know where the money is, or why the accounts have not been reconciled to date…”
“It appears to me that nobody has learned a thing from what’s gone on here. Wall Street is operating as if 2008 never happened,” said Collin Peterson, the top Democrat on the Committee, referring to the recent financial crisis.
Someone needs to go to jail in this case and Corzine better not skate because he is “in” with the “in” crowd, unlike Blago who was hit with an insanely tough sentence yesterday for doing less than Obama’s friend Rezko.
CME Executive Chairman Terrence Duffy said in prepared remarks. “Transfers of customer funds for the benefit of the firm constitute serious violations of our rules and of the Commodity Exchange Act.”
Ignorance of the law is not a defense but someone might have to tell Corzine that.
More Corzinisms –
“As a former United States Senator who recognizes the importance of congressional oversight, and recognizing my position as former chief executive officer in these terrible circumstances, I believe it is appropriate that I attempt to respond to your inquiries…”
“Even when I was at MF Global, my involvement in the firm’s clearing, settlement and payment mechanisms and accounting was limited…” Corzine said.
“I was stunned when I was told on Sunday, October 30, 2011, that MF Global could not account for many hundreds of millions of dollars of client money.”
Corzine said the investments in European debt was something the company did and he was merely capitalizing on that. He took responsibility for the trades but threw some responsibility off on traders and executives as he took responsibility. He apologized but he tried to do his best.
Corzine did admit to making the prudent European debt trades, which means he did not understand the grave risk and does not seem to know the meaning of the word, “prudent” –
“At the time that MF Global entered into the transactions, I believed that its investments in short-term European debt securities were prudent,” he said.
Apparently, the exposure to European debt was not shared candidly –
Steve Luparello, vice chairman of the Financial Industry Regulatory Authority, said that MF Global was not fully candid with FINRA in 2010 when the firm was asked about its exposure to European debt. He was, according to him, told at the end of September, 2010 that it “did not have any such positions” in European sovereign debt.
“We later learned that the firm began entering into transactions that carried European debt exposure in mid-September 2010,” Luparello said.
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