Corzine denies he knew customer funds used

Reuters News
Posted: Dec 15, 2011 2:08 PM
Corzine denies he knew customer funds used

WASHINGTON (Reuters) - Former MF Global chief Jon Corzine on Thursday denied an allegation that he knew the now-bankrupt brokerage firm used customer money to lend to a European affiliate.

On Tuesday, CME Group Executive Chairman Terrence Duffy, told a Senate committee that a CME auditor participated in a phone call during which an MF Global employee indicated that Corzine knew the firm used customer money to lend $175 million to its European affiliate.

"I don't know the source of the suggestion but let me be clear," Corzine told a House Financial Services subcommittee on Thursday. "I did not instruct anyone to lend customer funds to MF Global or any of its affiliates, nor was I told that anyone had done so."

Duffy told the Senate Agriculture Committee on Tuesday that his company has provided this information to the Justice Department and the Commodity Futures Trading Commission, which are investigating the matter.

MF Global filed for bankruptcy on October 31 after it was forced to reveal that it had made a $6.3 billion bet on European sovereign debt, spooking investors and customers.

The ensuing search for missing money has sent reverberations through the farm belt and trading floors, and has attracted the attention of the FBI and federal prosecutors.

A trustee liquidating the firm has estimated the customer funds shortfall could be as high as $1.2 billion.

(Reporting by Christopher Doering and Sarah N. Lynch; Writing by Dave Clarke; Editing by Tim Dobbyn)