(Bloomberg News) Jon S. Corzine, former chairman and chief executive officer of MF Global Holdings Ltd., will apologize to investors, customers and employees of the failed New York broker and tell lawmakers he doesn't know the location of the estimated $1.2 billion in missing client money.
"I simply do not know where the money is, or why the accounts have not been reconciled to date," Corzine said in a statement prepared for a House Agriculture Committee hearing in Washington today.
Corzine, a Democrat who served in the Senate and as New Jersey's governor before joining MF Global, is scheduled to testify on events leading to the brokerage's filing for bankruptcy protection on Oct. 31. James W. Giddens, the trustee overseeing the liquidation of the firm, estimated that $1.2 billion in client money is missing, and the Commodity Futures Trading Commission, Securities and Exchange Commission and Justice Department are investigating the collapse.
Corzine, who resigned from his MF Global positions on Nov. 4, said in the 21-page statement that he was "stunned" to learn on Oct. 30 that the company couldn't account for "many hundreds of millions of dollars." His appearance before the House Agriculture Committee, which oversees the CFTC, comes after the panel voted to issue a subpoena to compel his testimony. The Senate Agriculture Committee and a House Financial Services subcommittee also voted to subpoena Corzine.
In his prepared remarks, Corzine apologized to MF Global's customers, investors and former employees who have suffered because of the bankruptcy. "Their plight weighs on my mind every day -- every hour," he said in the statement.
He said that he would attempt to answer questions and avoid relying on his Fifth Amendment right to remain silent. "As a former United States Senator who recognizes the importance of congressional oversight, and recognizing my position as former chief executive officer in these terrible circumstances, I believe it is appropriate that I attempt to respond to your inquiries," Corzine said. At the same time, "without adequate time and materials to prepare, I may be unable to respond to various questions," he said.
Corzine said he offered to testify to Congress without subpoena in January, by which time he might have been better able to prepare.
"I want to emphasize that, since my resignation from MF Global on November 3, 2011, I have not had access to the information that I would need to understand what happened," Corzine said. "It is extremely difficult for me to reconstruct the events that occurred during the chaotic days and the last hours leading up to the bankruptcy filing."
CFTC commissioner Jill Sommers, testifying in advance of Corzine, said regulators are still working to trace all the transactions and that some client funds may be recovered.
"If there is any customer money that has been transferred out of the accounts, that is part of what we are working together to find and that money will be clawed back to be distributed back to customers," Sommers, the commissioner overseeing the agency's investigation of MF Global, told the committee.