Thu December 8, 2011
Corzine Apologizes, Defends Actions Of MF Global, May Invoke Fifth
Originally published on Thu December 8, 2011 12:11 pm
Former New Jersey senator and governor Jon Corzine, who led MF Global as it spectacularly collapsed in a bankruptcy that has left $1.2 billion in client money missing, is due at a House Agriculture Committee hearing this morning to face questions about what happened.
While he has submitted a statement, The Associated Press says Corzine is also expected to invoke the Fifth Amendment and decline to answer any potentially damaging questions that could be used against him in court. Still, his statement is an extensive defense of his actions.
In Corzine's statement, which is posted here, he begins by saying:
"Recognizing the enormous impact on many peoples' lives resulting from the events surrounding the MF Global bankruptcy, I appear at today's hearing with great sadness. My sadness, of course, pales in comparison to the losses and hardships that customers, employees and investors have suffered as a result of MF Global's bankruptcy. Their plight weighs on my mind every day – every hour. And, as the chief executive officer of MF Global at the time of its bankruptcy, I apologize to all those affected."
He also defends the investment firm's decision to invest in European government debt and says MF Global actually reduced its level of risk under his leadership:
"One of the recurrent themes in the media has been that MF Global took on too much risk during my tenure, in particular the amount of leverage that MF Global bore at the time of its bankruptcy. In fact, MF Global reduced leverage. In the quarter ended March 31, 2010, MF Global's leverage was 37.3. During my tenure, it was consistently around 30.7."
In his statement Corzine, a Democrat, also disputes suggestions that he tried to influence regulators who were pushing companies such as MF Global to reduce their risk exposures. He spoke, for instance, "on only limited occasions" with Chairman Gary Gensler of the Commodity Futures Trading Commission, Corzine says, and "no private discussions about the CFTC's regulation or oversight of MF Global."
As for the missing funds, Corzine says "I simply do not know where the money is, or why the accounts have not been reconciled to date."
Corzine resigned from MF Global in November.
The hearing is scheduled to begin at 9:30 a.m. ET. It will be webcast by C-SPAN.org.
Update at 1:10 p.m. ET. Corzine Has Begun Speaking:
He's now reading his prepared statement.