The House Financial Services Committee held an oversight and investigations hearing on the collapse of MF Global, a major global financial derivatives broker that filed for bankruptcy in October 2011.
The hearing focused on the decisions during the company's final days that led to the disappearance of up to $1.6 billion in customer funds. Four former executives, who were involved in decision-making in last week before bankruptcy, were called as witnesses. Edith O'Brien, the Assistant Treasurer for MF Global, refused to answer questions, invoking her fifth amendment right not to give testimony that might incriminate herself.
The other three witnesses from MF Global were Laurie Ferber, General Counsel for MF Global; Henri Steenkamp, MF Global Chief Financial Officer; and Christine Serwinski, Chief Financial Officer for MF Global North America.
In a sometimes heated exchange, members of congress questioned the three witnesses about how the firm handled customer money and about the handling of creditors and customers in the ongoing bankruptcy process.
This is the third hearing the Subcommittee has held on MF Global since it began investigating. The Subcommittee questioned former MF Global CEO Jon Corzine and credit rating agency officials who had evaluated the firm’s credit worthiness in the first two hearings. Jon Corzine was Governor of New Jersey from 2006-2010.
The investigation aims to "not only to find out where the money went but to identify what went wrong in order to prevent this from happening again," Subcommittee Chairman Rep. Randy Neugebauer (R-TX) said.
Witnesses from J.P. Morgan Chase and the Financial Accounting Standards Board will also testify.