A U.S. House of Representatives committee voted to subpoena Jon Corzine to testify before Congress about the collapse of MF Global Holdings Ltd., after the former CEO refused an earlier invitation.
The move intensifies pressure on Corzine, who has been largely absent from public view since he resigned as chief executive early last month. His lawyer had previously told the committee that the former New Jersey governor would be unable to attend a hearing set for December 8, the panel's chairman said on Friday.
The House Agriculture Committee is holding the hearing to examine the collapse of the futures brokerage and the search for hundreds of millions of dollars in missing customer funds.
It is this committee's responsibility to shed light on the facts and circumstances surrounding the bankruptcy, said Frank Lucas, the Republican chairman of committee.
A spokesman for Corzine and his lawyer, Andrew Levander, declined immediate comment.
MF Global filed for bankruptcy on October 31, after $6.3 billion in risky bets on European sovereign debt spooked investors and an effort to sell the company failed.
Investigators are searching for as much as $1.2 billion in missing customer money, which regulators said the company may have diverted for its own needs.
It is in Corzine's best interest to invoke his right to avoid self-incrimination under the Fifth Amendment of the U.S. Constitution, said Barry Pollack, a criminal defense attorney at Miller Chevalier.
But Pollack said public figures are genetically predisposed to give their side of the story.
His best case scenario in testifying is that they use him as a punching bag. His worse case scenario is that he provides testimony that can subsequently be used by law enforcement authorities putting together a criminal case against him, Pollack said.
U.S. regulators are investigating MF Global's business practices, including its accounting and disclosures. The FBI also has shown an interest in the missing funds.
Congress is holding a series of hearings examining whether regulators and company insiders could have done more to prevent the failure and protect investors, traders and farmers who may be out hundreds of millions of dollars.
The Senate Agriculture Committee and a House Financial Services panel have also called on Corzine and others to testify later this month.
In addition to governor, Corzine served as a U.S. senator from New Jersey and, before that, CEO of Goldman Sachs in the late 1990s. He took over as head of MF Global last year after failing to win reelection as governor.
Lucas told reporters on Friday that the House Agriculture Committee had requested that Corzine appear and received a letter from Corzine's attorney saying he would not be available on December 8, the requested date.
We are putting the pieces in place to compel testimony, Lucas said. It is too important to let slide.
Friday's vote to issue a subpoena was unanimous with bipartisan backing.
I am in full support of the endeavor we are undertaking today, said Representative Collin Peterson, the committee's top Democrat. It is imperative that we hear directly from all those involved.
The House Agriculture Committee also expects to hear from the Commodity Futures Trading Commission and the Financial Industry Regulatory Authority, two of the many regulators responsible for overseeing MF Global.
A committee aide said the panel last issued a subpoena in 1996.
Neither MF Global nor its executives has been charged with wrongdoing.
(Reporting by Alexandra Alper and Charles Abbott in Washington, additional reporting by Grant McCool in New York; Editing by Steve Orlofsky and Dave Zimmerman)