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MF Global: funds found but mystery deepens

As FBI and Justice Department investigations into the collapse of MF Global continue, there have been several developments in recent days. Unfortunately, for those desperate to extricate their money from the failed commodity broker, the mysteries surrounding the case have only deepened.

Farmers, ranchers and elevators are among members of the unfortunate group affected by the brokerage firm’s Oct. 31 Chapter 11 bankruptcy and the subsequent fallout. Some $600 million in customer funds (later raised to $1.2 billion) have been “lost” by MF Global.

Meanwhile, as they deride the efforts of those charged with oversight of MF Global, financial Web-sites are red-hot with speculation about how the firm illegally mixed customer and firm funds to patch up poor investment decisions.

Now, a substantial portion of that lost money may have been found. On Tuesday, multiple reports claimed $200 million had been located in the British branch of JPMorgan Chase.

How and why those millions crossed the Atlantic will surely be part of the hearings scheduled by Congress to look into the matter. The Senate Agriculture Committee – actually set to look into Wall Street reform but, surely, unable to keep from delving into MF Global -- will have first crack on Thursday. That will be followed by a MF Global-dedicated hearing on Dec. 13. The House Finance Committee will have its shot two days later.

Jon Corzine, who recently resigned as head of MF Global, has been asked to testify at the Dec. 13 hearing. If he agrees, the under-fire, former New Jersey senator will find the proceedings uncomfortable.

At least one member of the Senate Agriculture Committee – ranking member Sen. Pat Roberts of Kansas -- is unlikely to treat his former colleague with kid gloves.

"As the former head of MF Global, Jon Corzine is the only one that can answer the most pressing questions regarding the firm's downfall and its continuing impact on thousands of Americans,” Roberts said in a statement. “That is why I called for specific MF Global hearings and insisted that Mr. Corzine testify...

“It was clear to me that a previously planned hearing on Dodd-Frank implementation was not going to get answers for those that have been victims of the MF Global bankruptcy. This extraordinary and unprecedented set of events certainly merits special attention from our committee.”

Farming/ranching customers of MF Global may want to check out the newly-formed Commodity Customer Coalition. Farm Press will soon post a lengthy interview with John Roe, one of the coalition founders.

In the meantime, check out a video interview with another coalition founder, James Koutoulas, here.

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