(Bloomberg News) MF Global Holdings Ltd. General Counsel Laurie Ferber twice resisted providing assurances to JPMorgan Chase & Co. that the company was complying with rules to segregate customers' collateral, saying language in a draft provided by the bank was too broad.

JPMorgan was "specifically interested in two transfers" that occurred the morning of Oct. 28, Ferber said in testimony prepared for a House Financial Services subcommittee hearing tomorrow. The first was a $200 million transfer from a segregated account at the firm's brokerage to a "house" account, followed by a move of $175 million from the house account to a London subsidiary's account at JPMorgan, she said.

"Although I had no reason to believe that any non- compliant transfers from segregated accounts had occurred or would occur, I did not think that any individual officer or employee should be asked to issue such a broad certificate," Ferber said in in her testimony. Any employee making such an assurance would have had to personally handle all the transfers or been able to review all the transactions within the available timeframe, she said.

Representative Randy Neugebauer, a Texas Republican who leads the Financial Services investigations subcommittee, will hold its third hearing on events leading to MF Global's Oct. 31 bankruptcy, a collapse that left a customer funds shortfall estimated at $1.6 billion.

Treasurer to Testify

Among those set to testify this week is Edith O'Brien, a Chicago-based MF Global executive identified by former Chief Executive Officer Jon S. Corzine as having knowledge of fund transfers from customer accounts. She was subpoenaed by the subcommittee after turning down a request to appear.

Ferber's prepared remarks address transfers that have come under question in the wake of a Financial Services Committee staff memo circulated to lawmakers last week.

"On the afternoon of Friday, October 28, MF Global transferred $200 million from a segregated customer account at JPMC to cover a $175 million overdraft in one of MF Global's JPMC accounts in London," according to the five-page memo. "Ms. O'Brien wrote in an e-mail that the transfer was 'Per JC's [Jon Corzine's] direct instructions'."

Barry Zubrow, JPMorgan's chief risk officer, called Corzine to seek assurances that the funds belonged to MF Global and not customers. JPMorgan drafted a letter to be signed by O'Brien to ensure that MF Global was complying with the rules, according to the memo.

In her testimony, Ferber said she spoke to officials at the bank on Oct. 28 and requested that they narrow the language.

"I then spoke to the person in Chicago whom JPMorgan identified in the certificate and was given the understanding that she would sign the certificate if it were limited to the two transactions the bank had expressed interest in," she said.

Ferber doesn't identify the individual in Chicago. She conferred a second time with JPMorgan, which complied with the request and provided a new draft with narrower language the next day. Ferber turned the revised draft over to a colleague and wasn't involved in discussions after that point, she said.

The letter was never signed, according to the House memo.

Diane M. Genova, JPMorgan's deputy general counsel, is scheduled to testify on the bank's role during MF Global's final days. Daniel J. Roth, the president and chief executive officer of the National Futures Association, and Susan M. Cosper, the technical director of the Financial Accounting Standards Board, are also scheduled to testify.

European Debt

MF Global and its brokerage sought Chapter 11 bankruptcy on Oct. 31 after a $6.3 billion bet on the bonds of some of Europe's most indebted nations prompted regulator concerns and credit rating downgrades. Corzine quit MF Global Nov. 4.

A spokesman for Corzine, Steven Goldberg, said last week that the former MF Global CEO "never gave any instruction to misuse customer funds and never intended anyone at MF Global to misuse customer funds."

Corzine made similar statements during an appearance before the House panel in December and said that he doesn't know where client funds went.

"I never intended anyone at MF Global to misuse customer funds and I don't believe that anything I said could reasonably have been interpreted as an instruction to misuse customer funds," Corzine told lawmakers at the December hearing.

O'Brien is scheduled to appear before lawmakers this week along with Christine Serwinski, another MF Global executive, and Henri Steenkamp, the firm's chief financial officer.

Steenkamp, in his testimony, said he had "limited knowledge" of the movement of segregated customer funds in the final days before the firm's failure. Steenkamp said he understood that lawmakers would have questions about the missing funds.

"I share many of these questions and I am personally extremely frustrated and distressed that they remain outstanding and the client funds have not been paid in full," Steenkamp said in his prepared remarks.