- MF Global update: Bankruptcy proceedings, hearings and customer advocates.
- Latest on MF Global collapse and fallout.
- A conversation with John Roe, co-founder of the Commodity Customer Coalition.
On the coalition’s interactions with Congress…
“Congress has been very, very busy with the payroll tax, funding government, etc. It’s been difficult for (legislators) to give us time. But we’re working with them.
“A number of Chicago-area congressmen will be filing a letter to the CFTC (Commodity Futures Trading Commission) later this week. It will indicate they support our legal theory and actions.
“Additionally, we’re working with them to ask more relevant questions on the record from the House Financial Services Committee’s (Oversight and Investigations subcommittee). And we’re advising them going forward on potential solutions and how to get the culpable players brought to justice, if necessary.
“So, we’re continuing to work with Congress and have gotten support from both sides of the aisle. With one notable exception, no one has taken this to a partisan area. We think it is not a ‘left/right’ issue but a ‘right/wrong’ issue and Congress is approaching it as such.”
Lines of questioning that the committees didn’t pursue that they should have?
“I think the House Financial Services Committee got closer to the correct lines. They started to ask questions relating to fraud and (former MF Global head Jon) Corzine’s reasoning.
“Corzine is saying ‘I’m cooperating and doing everything I can.’ Yet, the only thing he’s done to help investigators is his useless testimony before Congress. He quit (as MF Global head) on Nov. 3 or Nov. 4. Well, if you don’t have any culpability why quit? Why aren’t you down there with your sleeves rolled up helping to find this money?
“The hearings are structured in way that’s difficult” to dig into the facts. “It’s not like cross-examining witnesses in court where you have all the time you need. They have to move on, allow other committee members an opportunity to ask questions.
On the CFTC’s views about possibly “legitimate” MF Global actions…
“One of the questions that should’ve been asked (involves) the CFTC saying there can’t be a shortfall in customer funds. The second there’s a shortfall, the rules have been broken.
“Yet, in the press, we hear from the CFTC ‘Well, it looks like MF Global did, in fact, transfer the money. But those transfers may have been legitimate and therefore (customers) can’t get (those funds) back.’
“Well, I’d like to hear under what scenario you could have a legitimate transfer that results in a shortfall of customer funds. How would that not result in a call-back? That question needs to be asked.”
The CFTC should also be asked “why they haven’t moved or petitioned for Mr. Corzine and the rest of the (MF Global) board’s assets to be frozen? Why haven’t they asked them to surrender their passports?
“We have $1.2 billion in missing customer funds and no one has moved to do that? I’ve seen cases involving less than $1 million missing where that’s happened.
The CFTC needs to be asked “why it decided not to initiate an immediate call-back when there was an apparent shortfall? Why didn’t they petition the court to do that before going into a SIPA (Security Investors Protection Act) proceeding?”