Ex-MF Global exec refuses to answer panel

A former MF Global executive has refused to answer lawmakers' questions about $200 million that was transferred out of a customer account days before the firm collapsed, invoking her Fifth Amendment right against self-incrimination.

Edith O'Brien, a former assistant treasurer at MF Global, was subpoenaed to testify before the House Financial Services oversight subcommittee hearing about an email she sent, which appears to contradict testimony from Jon Corzine, the firm's then-CEO.

The email says Corzine ordered the transfer on Oct. 28 to cover an overdraft in the firm's bank account in London. The committee cited the email in a memo released last week.

"On the advice of counsel, I respectfully decline to answer based on my constitutional right," O'Brien responded to a question about the transfer.

Corzine testified in December that he never directed anyone to use customer funds to fix the overdraft and he wasn't told that customer money was used.

MF Global filed for bankruptcy protection Oct. 31. The company failed after a disastrous bet on European debt. About $1.6 billion in customer money hasn't been recovered. Corzine, a former Goldman Sachs chief executive, New Jersey governor and U.S. senator from the state, stepped down as MF Global's CEO in November.

In addition to Congress, federal regulators and a federal grand jury in Chicago are investigating the MF Global failure.

No one has been charged in the case. If the firm misused client money, it would violate a fundamental investor protection for people who trade options and futures.

Christine Serwinski, the firm's chief financial officer for North America, testified that she learned on Oct. 27 of a "substantial deficit" in cash kept by the firm in customer accounts to cushion against potential losses.

Serwinski said the deficit didn't violate federal rules but made her uncomfortable.

When asked who at MF Global had the authority to approve the $200-million transfer, Serwinski said two people, O'Brien and Global Treasurer Vinay Mahajan. She also said she wouldn't have approved such a request if the transfer used customer money.