MF Global customers to seek subpoenas for Corzine, others

Mon Nov 26, 2012 10:40pm EST
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By Nick Brown

NEW YORK (Reuters) - A group of former MF Global customers on Monday asked a court for permission to subpoena the commodities broker's executives, including former CEO Jon Corzine, who was blamed in a congressional report this month for MF Global's collapse.

The Commodity Customer Coalition, an advocate for trader customers who lost money when MF Global went under, is seeking to subpoena Corzine, Chief Financial Officer Henri Steenkamp, Chief Operating Officer Bradley Abelow and others, according to court papers filed in the U.S. Bankruptcy Court in Manhattan.

While Corzine has stepped down, some executives remain at the company, assisting in its wind-down. Abelow, the highest-ranking executive still at the firm, just last week gave his notice and is leaving at the end of the week, a person familiar with the matter told Reuters on Monday.

MF Global MFGLQ.PK went bankrupt in October 2011 after its heavy exposure to European sovereign debt spooked investors. The case has become a political firestorm as investigators in Congress and elsewhere try to identify the source of an estimated $1.6 billion hole in customer trading accounts.

Corzine's role has been unclear. James Giddens, the trustee liquidating MF's broker-dealer unit, said in a June report that Corzine failed to address growing liquidity needs as he built the firm into a global investment powerhouse.

Giddens said MF Global used customer funds to cover liquidity gaps as the firm teetered on the brink.

More recently, the Republican-controlled House Financial Services Committee put the blame squarely on Corzine, saying in a November 15 report that he failed to maintain the controls necessary to protect customer funds.

Corzine, a former co-chairman of Goldman Sachs (GS.N: Quote) who also served as a Democratic U.S. senator and governor of New Jersey, has denied any wrongdoing.   Continued...

The sign marking the MF Global Holdings Ltd. offices at 52nd Street in midtown Manhattan is seen in New York November 2, 2011. REUTERS/Shannon Stapleton