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发帖数: 29846 | 1 By SCOTT PATTERSON, AARON LUCCHETTI and JULIE STEINBERG
"I don't know."
Those three words dominated a House subcommittee hearing Wednesday where
lawmakers pushed MF Global Holdings Ltd. MFGLQ +5.77% executives to explain
how $1.6 billion went missing from customer accounts as the securities firm
collapsed.
For more than two hours, three MF Global executives frustrated and stymied
lawmakers in both parties who demanded answers about money transfers made in
late October that left the securities firm's customers with losses.
"This reminded me of a hearing we had…on Enron," where no one would admit
to anything, said Rep. Michael E. Capuano (D., Mass.).
MF Global's Major Players
And the person lawmakers hoped would be their star witness kept her mouth
shut. "On the advice of counsel, I respectfully decline to answer based on
my constitutional rights," said Edith O'Brien, MF Global's assistant
treasurer.
Much of the investigation centers on what the 46-year-old Ms. O'Brien knew
about a $175 million transfer to fix an overdraft at an MF Global bank
account at J.P. Morgan Chase JPM -1.88% & Co. in London. MF Global Chairman
and Chief Executive Jon S. Corzine told lawmakers in December that Ms. O'
Brien assured him that the transfer was proper.
Ms. O'Brien calmly invoked her rights against self-incrimination when asked
by Rep. Randy Neugebauer (R., Texas), chairman of the House Financial
Services' Subcommittee on Oversight and Investigations, whether she agreed
with Mr. Corzine's previous testimony.
Rep. Capuano got the same response when he asked Ms. O'Brien to confirm or
deny a report in The Wall Street Journal that her lawyers have been in
discussions with Justice Department representatives.
Former MF Global assistant treasurer Edith O'Brien, who has emerged as a key
figure in the disappearance of $1.6 billion in customer funds, declined to
answer any questions from lawmakers at a hearing before the House Financial
Services subcommittee, invoking her Fifth Amendment right against self-
incrimination.
The subcommittee chairman then dismissed Ms. O'Brien from the hearing. "Let'
s go," said her lawyer, Chris Barber. Ms. O'Brien smiled as she walked
toward the door.
After Ms. O'Brien left, lawmakers unsuccessfully questioned finance chief
Henri Steenkamp, general counsel Laurie Ferber and Christine Serwinski, the
North American finance chief, about specific transfers that led to the $1.6
billion shortfall.
Mr. Steenkamp hesitated to answer when Rep. Neugebauer poured water from one
container into another, asking what actions by MF Global could cause
customer funds to disappear. "I am appalled that you can't answer a simple
question like that," Rep. Neugebauer said.
But all three executives are in discussions with federal investigators. Mr.
Steenkamp said his lawyers have made a so-called proffer to federal
investigators. Such proffers can involve telling the government how someone
would testify as a precursor to an interview.
Ms. Serwinski said she has had in-person interviews with representatives
from the Justice Department and Commodity Futures Trading Commission. Ms.
Ferber told lawmakers she plans to meet with Justice Department officials on
April 6.
MF Global Chairman and CEO Corzine was in contact with J.P. Morgan officials
about a large transfer of customer funds to the bank before the firm
collapsed, Mike Spector reports on Markets Hub. (Photo: Mario Tama/Getty
Images)
The four MF Global executives, a J.P. Morgan lawyer and two other witnesses
seldom deviated from written testimony submitted to the panel before the
hearing. Rep. Neugebauer told reporters that he isn't sure if the
subcommittee would hold another hearing about the company, but lawmakers
could ask Mr. Corzine and Ms. O'Brien to return.
In an interview before the hearing, Rep. Neugebauer said the subcommittee
might finish its comprehensive report on MF Global's downfall by this summer.
The panel's staff has sifted through about 10,000 email messages, zeroing in
on 200 deemed especially important, according to a person familiar with the
situation. Most of the emails were sent the week before MF Global filed for
Chapter 11 bankruptcy protection on Oct. 31.
Lawmakers also grilled Mr. Steenkamp and Ms. Ferber about possible bonuses
they could get from working for a trustee overseeing the company's
bankruptcy estate. The Senate unanimously passed a resolution Tuesday urging
the trustee to abandon the bonus plan.
"I believe for all the hard work that we're doing, we are just asking to be
fairly compensated," Mr. Steenkamp replied, referring to the work he and
others are doing to maximize the value of the estate as it winds down. Ms.
Ferber said she deferred to the trustee's judgment.
'I unfortunately have limited knowledge of the specific movement of funds.'
—Henri Steenkamp, MF Global finance chief
By the end, lawmakers seemed resigned to walk away from Wednesday's hearing
with little new information. "We've got a panel full of people who can't
remember anything," said Rep. Stevan Pearce (R., N.M.).
—Mike Spector
and Jamila Trindle
contributed to this article. |
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