Panel blames Corzine for MF Global failure
A House panel says credit rating agencies and federal regulators contributed to MF Global's collapse last year. But it pinned most of the blame on ex-CEO Jon Corzine.
The report issued Thursday by the House Financial Services Oversight and Investigations subcommittee found Corzine's risky strategies caused the brokerage firm's failure.
That largely reiterated a statement released Wednesday by the committee's Republicans. Democrats on the panel did not endorse the report's findings.
MF Global was forced to seek bankruptcy protection last year, the eighth largest in U.S. history. More than $1 billion in customer money went missing. Corzine, a former U.S. senator and governor of New Jersey, stepped down as CEO in November 2011.
Still, the House panel's report said rating agencies Moody's and Standard & Poor's failed to identify the biggest risk: MF Global's $6.3-billion bet on European countries' debt.
And it noted that the Securities and Exchange Commission and the Commodity Futures Trading Commission failed to share important information about the firm with each other. The two regulators have oversight authority for MF Global.
S&P spokesman David Wargin said, "We monitored MF Global's creditworthiness and took ratings action as events warranted, based on a review of available information." The SEC disagreed with the report's findings. It noted it had shared a request for MF Global to increase its capital cushion against losses with the CFTC in August 2011.
On Wednesday, Corzine disputed through a spokesman the allegations made by the Republican lawmakers.
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