Lawmakers investigating the collapse of futures brokerage MF Global showed frustration with the firm's leaders about what happened to hundreds of millions of dollars in missing customer funds.
The Senate Agriculture Committee on Tuesday holds the second congressional hearing to feature former MF Global chief Jon Corzine, who has said he does not know where the money is.
Two top-ranking company executives -- Chief Operating Officer Bradley Abelow and Chief Financial Officer Henri Steenkamp -- also said in testimony prepared for the hearing that they don't have answers.
It's now been a month and a half since the firm collapsed and customer money is still nowhere to be found, Senate Agriculture Committee Chairwoman Debbie Stabenow said in a statement.
This isn't the Dark Ages. MF Global didn't keep their books with feather quills and dusty ledgers. The rules about keeping customer money segregated are pretty straightforward.
The brokerage filed for bankruptcy on October 31 after it was forced to reveal it bet $6.3 billion on European sovereign debt. That disclosure led to market concerns and ratings downgrades that ultimately doomed the firm.
The search for hundreds of millions of dollars in missing customer funds has sent reverberations through the Farm Belt and trading floors, and has attracted the attention of the FBI and federal prosecutors. Thousands of MF Global customers have had their money frozen.
Neither MF Global nor any of its executives has been charged with wrongdoing.
I unfortunately have limited knowledge of the specific movement of funds at the U.S. broker-dealer subsidiary, MF Global Inc, during the last two or three hectic business days prior to the bankruptcy filing, Steenkamp said in his prepared testimony.
A court-appointed trustee has estimated the shortfall of customer money at $1.2 billion, but other regulators say that figure is too high.
Steenkamp and Abelow used their remarks to paint a picture of a chaotic final descent into insolvency.
They will appear on the same panel with Corzine, but it is unclear if there will be any finger-pointing.
Corzine's prepared testimony is largely similar remarks he delivered before the House Agriculture Committee last week, when he apologized to MF Global's customers, employees and investors.
Corzine, a former U.S. senator and New Jersey governor, said he never intended to break rules about keeping customer funds segregated from firm money, but that an employee may have misinterpreted instructions to try to save the firm.
Farmers who became the collateral damage from MF Global's collapse will get a chance to air their frustrations on Tuesday and will tell lawmakers that their confidence in the markets has been shaken.
Roger Hupfer, a grain elevator operator with Freeland Bean & Grain in Freeland, Michigan, in prepared remarks, called any misuse of customer funds unethical and criminal.
He placed blame with regulators.
Those responsible for oversight fell way short of fulfilling their responsibilities, he said.
Two of MF Global's regulators -- Jill Sommers, the commissioner leading the Commodity Futures Trading Commission's review into MF Global, and CME Group Executive Chairman Terrence Duffy -- are scheduled to testify later on Tuesday.
(Reporting by Alexandra Alper, Aruna Viswanatha and Christopher Doering; writing by Karey Wutkowski; editing by John Wallace)