The House Agriculture Committee has subpoenaed Jon Corzine, former CEO of MF Global Holdings Ltd. and former governor of New Jersey, to attend a hearing Thursday to explain the events that led up to the company’s Oct. 31 bankruptcy and the disappearance of an estimated $1.2 billion in customer funds.

“The circumstances surrounding the MF Global bankruptcy are unprecedented. Many of our constituents [farmers] have lost funds and many more have lost confidence in futures and derivatives markets, which are under the jurisdiction of the committee,” said Committee Chairman Frank Lucas (R-OK) and Rep. Collin Peterson of Minnesota, the ranking Democrat on the panel.

At its hearing, the House Agriculture Committee plans to “examine the facts and circumstances that led up to the bankruptcy, and the efforts underway to recover customer funds and return them to their rightful owners,” they said.

“Corzine’s testimony is critical to fulfill our objectives on behalf of our constituents, which is why we have taken this extraordinary step to ensure his attendance.”

At a hearing before the Senate Banking Committee Tuesday (see Daily GPI, Dec. 7), the member of the Commodity Futures Trading Commission (CFTC) in charge of the investigation into MF Global, Commissioner Jill Sommers, said, “We have not located all of the funds that are missing.”

Sommers is scheduled to appear with Corzine and James Kobak, the lead counsel for the trustee for the liquidation of MF Global, before the House agriculture panel.

Initially it was believed that about $600 million in customer funds overseen by MF Global, primarily a futures brokerage, was missing. But “according to the MF Global bankruptcy trustee, as much as $1.2 billion or more of customer funds are missing. Where…have you [CFTC] been?” Sen. Richard Shelby of Alabama, the ranking Republican on the banking panel, asked CFTC Chairman Gary Gensler.

Shelby and other Republicans on the banking panel put Gensler on the hot seat because of his ties to Corzine. Corzine was Gensler’s boss at Goldman Sachs until 1997. As a result of his one-time relationship with Corzine, Gensler recused himself from the CFTC’s enforcement investigation, and Sommers was placed in charge.

Shelby last week called on the CFTC’s inspector general to open an investigation into the agency’s oversight and regulation of MF Global and Gensler’s recusal decision, and report the findings to the Senate Banking Committee.

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