Senator Debbie Stabenow, D-Mich., Chairwoman of the Senate Committee on Agriculture, Nutrition and Forestry, and Senator Pat Roberts, R-Kan., the Committee's Ranking Member, introduced and passed a bipartisan resolution opposing bonuses for MF Global executives, with unanimous support in the Senate. According to news reports, Louis Freeh, the trustee overseeing the bankruptcy of MF Global Holding Ltd, may submit a plan in the coming weeks asking a bankruptcy judge to pay bonuses to top MF Global executives - even though the company is now bankrupt and thousands of its customers' money is still missing.
Did Corzine Lie to Congress?
Last December, Jon Corzine appeared before a congressional committee investigating the spectacular collapse of MF Global, the financial broker that had gone bankrupt five weeks earlier, leaving $1.6 billion in client funds missing. In his testimony, Corzine, MF Global’s CEO at the time of the collapse, said, “I simply do not know where the money is.” But a newly disclosed Congressional memo appears to contradict Corzine’s testimony, raising questions about whether he lied to Congress.
MF Global clients see recovery prospects improving
Former clients of MF Global are growing more optimistic about the prospects for recovering their frozen money, which is helping to bid up the price of customer claims being resold to distressed debt traders and investors.
Most customers have received about 72 cents for every dollar they had invested with the futures broker, which filed for bankruptcy in October, and have filed claims in court for the rest.
Customers who want or need immediate payment can sell those claims to bidders who hope to make a profit on further recoveries through the bankruptcy process.
Distressed debt traders including Barclays, as well as investment banks like the Seaport Group and other entities, had been offering former customers around 90 cents on the dollar, in return for taking over their claims. But bids have steadily climbed, and last week, Barclays boosted its bid to 92 cents.
Ex-MF Global executive takes Fifth Amendment
A former MF Global executive has refused to answer lawmakers' questions about $200 million that was transferred out of a customer account days before the firm collapsed, invoking her Fifth Amendment right against self-incrimination.
Edith O'Brien, a former assistant treasurer at MF Global, was subpoenaed to testify before the House Financial Services oversight subcommittee hearing about an email she sent, which appears to contradict testimony from Jon Corzine, the firm's then-CEO.
The email says Corzine ordered the transfer on Oct. 28 to cover an overdraft in the firm's bank account in London. The committee cited the email in a memo released last week.