House Agriculture Committee Demands Facts on MF Global Collapse
Yesterday, the Full House Agriculture Committee held an oversight hearing to examine the collapse of MF Global, a large publicly traded brokerage house regulated by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). On October 31st, 2011, the firm filed for bankruptcy. Since the bankruptcy, huge amounts of the firm’s customers’ money have gone missing—with unaccounted estimates totaling approximately $1.2 billion.
Many farmers and agricultural producers rely on futures markets to smooth price volatility and manage the risks that are inherent to production agriculture. Numerous individuals - including many from the Fifth Congressional District, unfortunately - have been personally impacted by this bankruptcy, without being offered any discernable rationale for the circumstances surrounding MF Global’s collapse. Furthermore, this roughly $1 billion in customer investments remains unaccounted for; and MF Global has given no indication as to how and when their customers will recoup thier investments.
As the committee of jurisdiction over futures and derivatives markets, the Agriculture Committee last week voted by unanimous voice vote to subpoena former MF Global CEO Jon Corzine to testify on his role in the firm’s collapse. Mr. Corzine testified yesterday about the events leading up to the bankruptcy and the whereabouts of customer funds. In addition to Mr. Corzine, CFTC Commissioner and representatives from numerous related agriculture and financial organizations also offered testimony.
This hearing was just the first step by the Committee to review the facts and circumstances preceding the MF Global bankruptcy and the subsequent implications for MF Global customers. There’s still much oversight and work to be done, but I do believe this initial hearing put us all in a better position to address this situation, ensure that justice is served and begin to restore confidence in the futures markets.
During the hearing, I took the opportunity to question The Honorable Jill Sommers, Commissioner of the U.S. Commodity Futures Trading Commission, on the actions being taken by the CFTC to locate or recover customer funds and determine the reasons for shortfalls in the customer accounts. To view this exchange, click below.