Washington - Corzine Says He Never Authorized misuse Of Money

June 15, 2012 by sesfra709

ormer CEO of MF Global Inc., Jon Corzine (L), President and Chief Operating Officer of MF Global Holdings Ltd., Bradley Abelow (C) and Chief Financial Officer of MF Global Holdings Ltd., Henri Steenkamp (R) are sworn-in to testify before the Senate Agriculture Committee Investigative Hearing on the MF Global Bankruptcy, on Capitol Hill in Washington DC, USA, 13 December 2011. The financial collapse of MF Global is the eighth-largest bankruptcy in US history, with an estim Replica Tag Heuer Watches ated 1.2 billion US dollars in funds being unaccounted for. EPA/MICHAEL REYNOLDSWashington - Questioned by senators he once served with, Jon Corzine told a panel Tuesday that he never told anyone to misuse customer money that vanished when MF Global collapsed this fall.Advertisement: An estimated $1.2 billion in client funds are missing. Senators are demanding that Corzine and two other executives from the securities firm explain who authorized the transfer of money in the days before the firm became the eighth-largest bankruptcy in U.S. history. I never gave any instruction to anyone at MF Global to misuse customer funds, Corzine testified at a hearing of the Senate Agriculture Committee. Corzine, a former Democratic New Jersey senator and governor, resigned as CEO of the securities firm last month. Bradley Abelow, the firms president and chief operating officer, and Henri Steenkamp, the chief financial officer, also tried at the hearing to distance themselves from any decision to transfer the money. Brokers are required to keep client money separate from company funds. All three witnesses said they dont know where the money is. Yet their phrasing varied in subtle ways that could have legal distinctions. Corzine said he did not direct anyone to misuse the money. Abelow said he does not recall any conversation about customer funds being used for anything other than their intended purpose. Steenkamps stance was more sweeping. He said he did not authorize, approve or know of any transfers of customer funds out of their accounts. Depending on the circumstances, transferring money from customers accounts could violate securities laws and, in some cases, could amount to a crime. Federal authorities have begun criminal investigations. And regulators are looking into whether the firm broke securities rules. Funds dont simply disappear. Someone took action, whether legal or illegal, to move that money. And the effect of that decision is being felt across the countryside, said Kansas Sen. Pat Roberts, the committees top Republican. Roberts said MF Global violated a sacred rule of the futures industry, keeping customer funds separate from the firms ?and that it was the first time that had happened. You dont break the glass in regards to segregated funds. The executives said that given what is now known, they wouldnt have signed the firms last quarterly financial statement attesting that its internal financial controls were adequate. Under a 2002 anti-corporate-fraud law that Corzine co-wrote as a U.S. senator, the top executives of public companies must personally certify the accuracy of their companys financial statements. It can be a violation of the law for executives to sign a false statement. MF Global collapsed after a disastrous bet on European debt spooked its investors, customers and trading partners. The three executives say that they didnt become aware of the shortfall until hours before the firm filed for bankruptcy protection on Oct. 31. Tuesdays hearing included an added element of intrigue because Corzine, a former Democratic senator from New Jersey, was pressed by some senators he served with from 2000 through 2005. The Senate panel is one of three congressional committees to have issued subpoenas to compel Corzines testimony on the issue. It marked the first time a former senator has been subpoenaed by his former peers in more than 100 years, according to the Senate historians office. Many lawmakers have heard from farmers, ranchers and small business owners in their states who are missing money that was deposited with the firm. Agricultural businesses use brokerage firms like MF Global to help reduce their risks in an industry vulnerable to swings in oil, corn and other commodity prices. Corzine told lawmakers that he never intended to authorize the transfer of funds from customer accounts. He said he doesnt believe it would be possible for anyone to misinterpret anything he said as authorizing the misuse of customer funds. Corzine, Steenkamp and Abelow have been sued in class-action complaints on behalf of MF Global shareholders. The lawsuits accuse the executives of making false and misleading statements about MF Globals financial strength and cash balances. MF Global didnt list the European debt on its balance sheet for all to see. Instead, those holdings were shifted to the companys off-balance sheet, deep in its financial statements. Some separate filings with regulators excluded the European debt entirely. A lawyer for the trustee overseeing the liquidation of MF Globals brokerage operations said in court Friday that the trustees staff has discovered some suspicious trades in MF Global customer accounts that were made in the last days before the firm failed. The lawyer didnt provide details.

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