Senator Debbie Stabenow, Chairwoman of the U.S. Senate Committee on Agriculture Nutrition and Forestry, today said the failures of both MF Global and Peregrine Financial Group, which resulted in an unprecedented loss of customer funds, has dealt a devastating blow to customer confidence in the futures markets and urgent action is needed to recover those funds as well as rebuild faith in the markets. The failures at the two financial firms has devastated thousands of farmers, ranchers and small businesses who rely on the futures market to hedge business risk. Chairwoman Stabenow demanded answers at a hearing today examining the markets and the failures of the two now-bankrupt firms.
“Farmers, ranchers and other businesses need these markets to work to manage their risk,” Chairwoman Stabenow said. “With the droughts this year, we have certainly seen how serious those risks are. But one of those risks shouldn’t be that their futures brokerage firm will misuse their funds, go out of business and their money will have disappeared.”
Stabenow continued, “If customers don’t have faith in these markets, the markets will fail. It’s that simple. I hope today’s hearing can start to rebuild that faith for the millions of farmers, ranchers, and businesses that need these markets to work.”
Among those who testified at today’s hearing were the Hon. Gary Gensler, Chairman of the Commodity Futures Trading Commission, the Hon. Jill Sommers, Commissioner of the Commodity Futures Trading Commission, James Giddens, the Trustee overseeing the Securities Investment Protection Act liquidation of MF Global, Inc., Ira Bodenstein, the trustee overseeing the liquidation of Peregrine Financial Group, and Louis Freeh, the Bankruptcy Trustee, Freeh Group International Solutions, Wilmington, DE. *Freeh was unable to attend the hearing but submitted testimony for the record and will be answering questions for the record in writing.
Additional witnesses included the Hon. Walter Lukken, President and Chief Executive Officer, Futures Industry Association, Washington, DC; Mr. Terrence Duffy, President and Executive Chairman, CME Group, Chicago, IL; Mr. Dan Roth, President and Chief Executive Officer, National Futures Association, Chicago, IL; Ms. Diana Klemme, Vice President and Director-Grain Division, Grain Service Corporation, Atlanta, GA on behalf of the National Grain and Feed Association; and, Mr. John Roe, Co-Founder, Commodity Customer Coalition, Chicago, IL.
An archived webcast of the hearing can be accessed on the Senate Agriculture Committee’s website at http://ag.senate.gov.