Jon Corzine Testifies Again, $1.2 Billion Still Missing

Jon Corzine Testifies Again, $1.2 Billion Still Missing (ABC News)

Former MF Global CEO Jon Corzine is scheduled to testify before Congress again on Tuesday, this time before the Senate Agriculture, Nutrition and Forestry Committee, but the whereabouts of about $1.2 billion in client money is still unknown.

The bankruptcy of the commodities trading firm on Oct. 31 was the eighth largest in U.S. history.

Corzine testified before the House Agriculture Committee last Thursday, saying he was at a loss as to what happened to the misssing money. "I simply do not know where the money is, or why the accounts have not been reconciled to date," Corzine testified. "My understanding is that our books and records were reflecting the chaos that occurred in the last two or three days as the firm was under severe pressure and had lost the confidence of the marketplace."

The New York Times, however, reported that the former New Jersey governor and Goldman Sachs CEO "played a much larger, hands-on role in the firm's high-stakes risk-taking than has previously been known" and that Corzine, who became chief executive of MF Global in March 2010 and resigned Nov. 4, was "convinced that he could quickly turn the money-losing firm into a miniature Goldman Sachs."

According to the Times, Corzine "compulsively traded for the firm on his BlackBerry during meetings, sometimes dashing out to check on the markets." In a move considered out of the ordinary for a chief executive, Corzine "became a core member of the group that traded using the firm's money. His profits and losses appeared on a separate line in documents with his initials: JSC."

Steven Goldberg, an attorney for Corzine, declined to comment.

Rep. Frank Lucas, chairman of the House Agriculture Committee, said last week's hearing was only the first step in MF Global's customers getting their money restored.

"Former MF Global CEO Jon Corzine's presence was critical to our objective, and unsurprisingly, we are finding that there are still more questions than answers about the missing customer funds," he said. "There is a great deal more to learn if we are to restore confidence in the futures markets."

"My No. 1 priority is to make sure that customers who have been devastated by MF Global's collapse get their money back," Sen. Debbie Stabenow, D-Mich., chairwoman of the Senate Committee on Agriculture, Nutrition and Forestry, said in a statement.

The company's bankruptcy has "devastated thousands of customers – including farmers, ranchers, grain elevators, small business owners and others," she said.

Included in the witness list for Tuesday's hearing are representatives from the farming industry and commodities trading sector.

In addition to Corzine, two MF Global executives, Henri Steenkamp, chief financial officer, and Bradley Abelow, president and chief operating officer, will also testify Tuesday.

Also testifying will be Terrence Duffy, executive chairman of the derivatives and futures marketplace, CME Group, James W. Giddens, trustee over the liquidation of MF Globa, and Jill Sommers, commissioner of the Commodity Futures Trading Commission.

Corzine is also the target of at least one lawsuit by former employees of MF Global. Last week, Monica Rodriguez, MF Global's former head of credit for the Americas, and Cyrille Guillaume, managing director of its commodities and stock division in London, sued Corzine and the company's top executives, claiming they lied about its finances and encouraged workers to put their retirement savings into company stock that later plummeted, the Associated Press reported.

The two are seeking class-action status for everyone who got company stock as a benefit of working for MF Global after May 2010.

Jacob Zamansky, an attorney representing the two employees, said Corzine and the company's board breached their fiduciary duty to their employees and "destroyed" their retirement savings.

"Corzine encouraged MF Global employees to invest their retirement savings and compensation in company stock and he destroyed their wealth with his risky and outsized bets on euro sovereign debt," Zamansky told ABC News. "If employees had known MF Global's true financial condition, they could have refused to buy in or insisted on compensation arrangements that were all cash."

Goldberg said he had no comment on Corzine's behalf and that a response to the lawsuit had not yet been filed.