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CME Chief Suggests Corzine Knew MF Global Dipped Into Customer Money
Jon Corzine was back in Washington to answer questions on the downfall of MF Global Tuesday, and offered slightly stronger language to defend his ignorance of whether any commingling of customer funds took place as alleged, but the real bombshell came later in the day when CME Group Executive Chairman Terrence Duffy said he heard a different story from an MF Global employee.

Testifying before the Senate Agriculture Committee after an earlier panel featuring Corzine and two other top MF Global executives, Duffy said during Q&A that one of the firm's employees told the CME that Corzine knew about a loan to European affiliates shortly before the company's Oct. 31 bankruptcy filing, a loan that came from commingled customer funds.

The CME's auditors were told at 2 a.m. on Oct. 31 to stop looking for an accounting error, Duffy said, that MF Global had dipped into customer segregated funds and that Corzine was aware of the fact.
The CME's auditors were told at 2 a.m. on Oct. 31 to stop looking for an accounting error, Duffy said, that MF Global had dipped into customer segregated funds and that Corzine was aware of the fact.

CME is not undertaking its own investigation, Duffy said, after being told not to by the Commodity Futures Trading Commission and the Department of Justice. Duffy estimates the MF Global shortfall at between $700 million and $900 million. The $1.2 billion figure estimated by bankruptcy trustee James Giddens goes beyond the U.S. futures accounts that comprise the CME's estimate.

Corzine, who told a House committee last week that he had no knowledge of how as much as $1.2 billion in customer money went missing and that it was not his intent that any funds would be improperly moved, said Tuesday that he "never gave any instruction to misuse customer funds."

During the hearing, before the Senate Agriculture Committee, Corzine appeared with MF Global COO Bradley Abelow and CFO Henri Steenkamp. When Chairwoman Debbie Stabneow, D-Mich., asked all three where the missing customer funds went, Abelow and Steenkamp said they did not know either.
Posted by: 2011-12-14
http://www.rantburg.com/poparticle.php?ID=335227