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Washington’s lawmakers are racing to take first crack at one of the most hated men on Wall Street.
Yesterday, members of both the House and Senate were jockeying to put fallen MF Global CEO Jon Corzine on the hot seat after the collapse of the brokerage firm triggered multiple federal investigations and a massive search for some $1.2 billion in missing client money.
The House Agriculture Committee took the lead in the morning when it voted to subpoena Corzine, a former New Jersey governor and senator, to compel him to appear at a Dec. 8 hearing. It was a rare instance of lawmakers choosing to grill one of their own.
Just hours later, lawmakers on the Senate Agriculture Committee called for subpoenas to be issued to Corzine and other MF execs to make sure he shows up at a separate hearing scheduled for Dec. 13. Corzine hasn’t responded to that committee’s earlier request for him to appear.
And a third panel, the House Financial Services Subcommittee on Oversight and Investigations, has also requested that Corzine show up at yet another hearing on Dec. 15. That panel is planning to vote on Wednesday on whether to subpoena Corzine.
A spokesman for Corzine declined to comment.
Sources familiar with Corzine’s thinking believe that his first inclination is to use the public forums to plead his case after his once-lauded reputation has been all but obliterated.
But legal experts said that the typically outspoken Corzine is far better off staying mum.
“The risk of answering questions is disproportionate to benefits of doing so,” said veteran securities attorney Jacob Frenkel at Shulman Rogers.
Frenkel said that Corzine’s responses could be used in any criminal probes into MF.
“In other words, those who have testified have found these forums more like public floggings than an opportunity to provide clarity and information,” he added.
With three congressional panels looking to grill him, Corzine is facing tough questions about the $1.2 billion in customer funds that went missing in the wake of the broker-dealer’s demise and about why customer money was mingled with the firm’s own funds.
Corzine, a former Goldman Sachs CEO, will also be expected to explain his personal decision to gamble MF’s future on $6.3 billion in dicey European debt.
Meanwhile, all of MF’s seven corporate directors resigned yesterday, according to a regulatory filing with the Securities and Exchange Commission. Sources said the former board members have hired Davis Polk attorney Ed Polubinksi to represent them.
Sources said the appointment of former FBI chief Louis Freeh to preside over the bankruptcy of MF Global Holdings made the board irrelevant. An MF spokesman declined to comment.