In the case of the missing MF Global (MFGLQ) funds, the mystery continues after ex-firm CEO Jon Corzine attempted to give his two cents last week.
On Thursday, Corzine, in his first appearance since MF’s October 31 bankruptcy filing, sat in front of the House Agriculture Committee and had his opportunity to plead his case and offer some explanations.
He fell flat.
Corzine’s prepared statement hit the Internet before his appearance and set the tone for what lay ahead that morning.
Here’s some nuggets from his testimony, “I never intended to break any rules, whether it dealt with the segregation rules or any of the other rules that are applicable.”
When asked by the Committee on whether or not he authorized the transfer of customer funds into firm accounts (a major industry violation) Corzine said: “If I did, it was a misunderstanding.”
He has expressed sadness over MF’s collapse and said he feels worse about the firm’s customers, investors and employees. In response to this, Corzine said, “Their plight weighs on my mind every day — every hour.”
Perhaps the biggest question that everyone was hoping would be answered is, “Where’s the missing money?” Initially estimated around $600 million, the missing funds have been rumored at $1.2 billion.
“My own expectation, even at these late hours, is that the money will be recovered,” responded Corzine, “I simply do not know where the money is, or why the accounts have not been reconciled to date,” he said.
Corzine did not invoke his right to avoid self-incrimination under the Fifth Amendment; however, some critics found the ex-senator didn’t give direct answers regarding whether or not he lead the transfer of customer funds to firm accounts.
Trades May Have Contributed to Shortfall
On Friday, some answers may have been found regarding the $1.2 billion missing funds. According to the New York Times, the trustee responsible for liquidating MF Global’s brokerage unit has discovered questionable trades in customer accounts that could be associated with the fund problems.
The trustee’s lawyer, James Kobak, appeared at Federal Bankruptcy Court in Manhattan on Friday and said the majority of trades occurred close to the the weekend that MF Global filed for bankruptcy. He didn’t give any specifics on either the questionable trades or whether there had been criminal activity. He did note the suspected $1.2 billion figure may actually be higher from an estimated $5.8 billion in customer funds.
The treasure hunt will continue with the FBI also taking part in it. The missing money could also turn up in MF Global’s foreign subsidiaries.