U.S. Senator Debbie Stabenow, Chairwoman of the Senate Agriculture, Nutrition and Forestry Committee, today called for a subpoena to compel former MF Global CEO Jon Corzine and other MF Global executives to appear before the Agriculture Committee at a hearing on December 13th, if they will not do so voluntarily. Chairwoman Stabenow announced she had requested Mr. Corzine’s appearance at the December 13th hearing Monday. To date, Mr. Corzine has not agreed to appear. Chairwoman Stabenow is seeking investigative power to compel him to appear if necessary.
“MF Global’s customers, including many farmers and small business owners, trusted this firm to make purchases on their behalf and now their money is missing,” said Senator Stabenow. “A matter of this magnitude requires a thorough investigation, and that investigation must obviously include testimony from company executives. I would expect that MF Global executives would come speak with us voluntarily, but if they will not, then we must be prepared to take necessary action.”
The December 13th hearing is the latest step in an ongoing examination of the circumstances surrounding the October 31 bankruptcy of MF Global Holdings Ltd., the eighth largest bankruptcy in U.S. history. The Senate Agriculture Committee has jurisdiction over commodity trading and its regulatory agencies.
A vote of the full committee is required to make the current inquiry a formal committee investigation in order to give the committee subpoena power. Senator Stabenow announced today that she would convene a meeting of the Agriculture Committee to vote on the matter on Tuesday, December 6th.
MF Global customers are also being invited to testify at the December 13 hearing. Since MF Global declared bankruptcy, huge amounts of the firm’s customers’ money has gone missing—with estimates that as much as $1.2 billion was unaccounted for. The FBI is investigating possible criminal conduct related to the MF Global bankruptcy.
MF Global customers consisted of many farmers, ranchers, small business owners and other middle class Americans. As a result of the bankruptcy, MF Global customer accounts had been frozen and many customers still cannot access their own money. It is possible that customers will never reclaim all of their money, meaning individual families could lose thousands, and in many cases tens of thousands of dollars.
New York-based MF Global was in part a Futures Commission Merchant, coordinating the purchase and sale of futures contracts for its clients. Futures are a type of investment product used to hedge risk by locking in a known price on a commodity that otherwise fluctuates in value. For example, futures contracts can be used to lock in a set price on commodities like oil or agriculture products like corn and wheat.
As part of the ongoing examination of this matter, Senator Stabenow also convened a hearing on December 1st to question top officials at the Commodity Futures Trading Commission as well as the Securities and Exchange Commission about their oversight of MF Global and examine whether the protections in place to prevent a catastrophe of this sort are adequate. More hearings surrounding the collapse of MF Global are likely.