Jon Corzine, you have some explaining to do.
The former CEO of bankrupt broker MF Global is expected to be grilled during a Dec. 15 Capitol Hill hearing by a House subcommittee looking into “the decisions and events” leading up to the collapse of the firm last month.
Investigators probing the bankruptcy, the eighth-largest in US history, have discovered as much as $1.2 billion in customer cash missing from Corzine’s MF Global.
The embattled financier-turned-politician, who once headed Goldman Sachs, was invited yesterday by House Financial Services Oversight and Investigations Committee to explain the decision-making process behind wrong-way bets on $6.3 billion on toxic Europe sovereign debt.
An unknown portion of the missing $1.2 billion in customer cash belongs to small business people who had, in many circumstances, entrusted their life savings to Corzine’s firm — only to find their money frozen in a bankruptcy court maze.
“Jon Corzine should be ‘questioned’ from a jail cell,” Anthony Scano, a commodities trader, said on a Web site for burned MF customers.
When asked about Corzine’s whereabouts on CNBC earlier this week, Sen. Pat Roberts (R-Kan.), said, “I have no idea where Mr. Corzine is. He’s AWOL.”
Corzine’s spokesman, Steve Goldberg, declined to say whether Corzine would heed the invitation to testify.
Roberts’ parade of witnesses in the explosive probe also includes Gary Gensler, chairman of the Commodity Futures Trading Commission, who was former top aide to Corzine when they worked together at Goldman.
Of late, Gensler has been the regulator in charge of transactions that could be involved in the MF Global debacle. He’s recused himself from his own agency’s current probe of the affair.
Corzine reportedly had lobbied his old pal at the CFTC in search of favorable treatment in MF affairs.
Corzine’s former chief of staff while Garden State governor, Bradley Abelow, also was summoned by the panel because Abelow was the chief operating officer of the firm at the time of its collapse.
Investigators also want testimony from another top regulator with oversight of the MF affair, Robert Cook, who heads the Securities and Exchange Commission’s key department of trading and markets.
At least two federal investigation are under way at FBI offices in New York and Chicago, and at the CFTC.
Investigators believe the missing cash apparently vanished after it was unlawfully used to cover MF’s failed bets on risky European gambles.
In one new hopeful sign yesterday, CME Group promised to boost its backup protection pot to $550 million from a previous $250 million by early December.
It will help victims recover up to 75 percent of their lost assets instead of the previous 60 percent estimated by a bankruptcy trustee.
Jon Corzine online, Jon Corzine, MF Global, MF Global, Goldman Sachs, House Financial Services Oversight and Investigations Committee, Commodity Futures Trading Commission, Gary Gensler, Steve Goldberg, Anthony Scano, Bradley Abelow, Pat Roberts, bankruptcy court, Capitol Hill, Robert Cook, CFTC, Dec. 15, firstname.lastname@example.org