MF Global exec tied to money transfers clams up

Wed Mar 28, 2012 7:21pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Sarah N. Lynch and Aruna Viswanatha

WASHINGTON (Reuters) - An MF Global executive, who has emerged as a central figure in the desperate shifting of funds before the brokerage's collapse, refused to answer questions on Wednesday, frustrating lawmakers probing why more than $1 billion in customer money is missing.

Assistant Treasurer Edith O'Brien and other mid-level MF Global MFGLQ.PK executives, people who had operational control over money transfers at the brokerage, were called to testify before the investigations panel of the House Financial Services Committee.

O'Brien, a demure-appearing brunette dressed in a somber black dress suit, was excused after refusing to answer questions. The others remained to take scathing questions from the lawmakers who likened the missing customer funds to a grand heist.

The executives were unable to say why the money is missing, and who was responsible for it, keeping open the mystery nearly five months after MF Global filed for bankruptcy and former Chief Executive Jon Corzine resigned from the firm.

"Obviously there was a terrible failure here of some kind, but what it was, I don't know," said MF Global General Counsel Laurie Ferber.

Lawmakers were angered by such non-committal answers.

"Bonnie and Clyde, they were chumps," said Republican Representative Steve Pearce, referring to bank-robbing duo from the 1930s. "You guys have people send things electronically...and nobody's responsible, and you can't even declare that it was robbed or stolen."

O'Brien was the star witness, especially after the congressional panel released last week details of an email from O'Brien that said a $175 million transfer, that may have included customer funds, was "Per JC's <Jon Corzine's> direct instructions."   Continued...

Former MF Global CEO Jon Corzine testifies before a House Financial Services Committee Oversight and Investigations Subcommittee hearing on the collapse of MF Global, at the U.S. Capitol in Washington, December 15, 2011. REUTERS/Jonathan Ernst