With much anticipation, former MF Global CEO Jon Corzine testified under subpoena to a House Agriculture Committee panel today. Corzine read a written statement and then responded to questions from lawmakers. In the statement, he made clear his position: He doesn't really know what happened.
Yes, Jon Corzine is saying that he is basically clueless about what happened to the hundreds of millions of dollars in segregated funds that were taken from customer accounts in the company's final days. (These funds, which have yet to be located, could be more than $1 billion, according to the last estimate.) He called the money's disappearance part of the "chaotic transactions in the firm's final days," and he said he was not actively involved in looking at the details of financial transactions.
"I simply do not know where the money is or why the money has not been reconciled today," he said today in his testimony.
Corzine's statement, which he read in front of lawmakers, paints him as a man removed from the daily details of transactions that moved money around the firm. He spent considerable energy expressing sympathy for the customers and farmers who have lost money in the debacle. At the end of his statement, he officially apologized for the company's collapse and the lost funds.
"I am devastated. My sadness, of course, pales in comparison to the losses and hardships that customers, employees, and investors have suffered as a result of MF Global's bankruptcy," Corzine said. "I'm sorry."
The full text of Corzine's submitted statement can be read here.
Following the statement, Corzine was drilled on whether he knew anything about the missing customer funds. Rep. Frank Lucas, R-Okla., led the questioning.
"I never intended to break any rules," Corzine said. "I am not in a position to know anything specifically about specific funds."
Already, this response, which was delivered with some stuttering and delay, will likely come under the microscope. The reason? You notice that Corzine did not answer the question with a "No."
"How do you respond to the charge that MF Global's books were a mess?" asked Lucas.
Corzine said it was his impression that the numbers were a mess due to the "final days of chaos."
He was also asked about the 30-1 leverage used at the firm. "It was higher than I would have liked at the time." Corzine said. He said MF Global was looking to sell its FCM (futures commission merchant), which would have "lowered the leverage down into the mid-teens, which was certainly the strategic objective."
(Disclosure: The author is a former MF Global Client, and he is still looking for some of his money.)