MF Global: Corzine goes before Senate

@CNNMoney December 22, 2011: 10:11 AM ET
The search for the missing money at bankrupt brokerage MF Global continues on Capitol Hill Tuesday, as the Senate Agriculture Committee takes up the issue.

Former MF Global CEO Jon Corzine -- also an ex-senator and governor of New Jersey -- will testify again on Tuesday.

NEW YORK (CNNMoney) -- It's not just Congress that wants answers about the missing money at bankrupt brokerage MF Global.

So does Dean Tofteland.

Tofteland is a Minnesota farmer and former MF Global customer whose commodities account has been frozen since the firm's bankruptcy in late October. (MF Global: Sorting through the debacle.)

He'll be one of 10 witnesses set to appear on Tuesday before the Senate Agriculture Committee, the second congressional hearing into MF Global's collapse.

Former MF Global CEO Jon Corzine will be back in the hot seat, this time flanked by two former colleagues from the brokerage's parent company, MF Global Holdings: Chief operating officer Bradley Abelow and chief financial officer Henri Steenkamp.

Also set to testify is James Giddens, the trustee overseeing the brokerage's liquidation.

For Tofteland, MF Global's failure has left him unable to access more than $200,000 of his own money. He has been forced to delay seed purchases and leaving next year's harvest uncertain.

The plight is a common one for farmers who rely on the commodities market to protect against volatility in crop prices.

Exchange operator CME Group has accused MF Global of unlawfully "commingling" customer money with its own ahead of its bankruptcy. Customer funds are supposed to be segregated from a firm's own assets.

Six weeks on, more than $1 billion in customer money remains missing, according to Giddens. The shortfall has drawn the attention of federal regulators and the FBI.

Corzine is also due to appear before the House Financial Services Committee on Thursday to discuss the MF Global (MFGLQ) collapse. He offered testimony on the issue before the House Agriculture Committee last week, saying he did not know where the missing money was and denying ordering transfers from customer accounts.

This testimony, Tofteland said, shed little light on the case for anxious customers. He is hoping for more information when Corzine appears along with his former lieutenants on Tuesday.

"Between him and those other two guys, they should have a pretty good idea of where the money went," Tofteland said. "Commingling or whatever they call it in their world -- back on Main Street, it's called stealing."

Based on advance copies of the testimony from Abelow and Steenkamp, however, it appears they may not be any more help in finding the missing money than Corzine has been.

Abelow said in his brief prepared remarks that he is "deeply troubled" by the shortfall, but does not know where the money is. Steenkamp, supposedly in charge of the firm's financials, said he was only made aware of the shortfall after the fact.

"As a general matter, I was not involved with the details of segregated funds in the course of my duties as global CFO," Steenkamp said. In the firms final days, he added, "my attention was appropriately focused on crisis management and strategic issues relating to the sale of the company."

A spokeswoman for MF Global did not respond to a request for comment, nor did lawyers for Steenkamp and Abelow.

In his own testimony, Tofteland said he won't try to pose as "an expert recommending a solution," and will instead simply explain how the missing money has affected his business. Afterward, he and his 15-year-old daughter plan to spend an extra day in Washington.

"We're going to see the sights and take in the experience of a Senate committee hearing," he said. "I'm really glad that they're holding the hearings, because it means at least some of the people in Washington know who they work for and are trying to get some answers for us." To top of page

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