MF Global Official to Testify Before Congress
Ex-chief risk officer for MF Global will appear at Congressional hearing.
Compiled by staff
Published: Jan 30, 2012
According to Reuters, a Congressional staffer has confirmed that Michael Roseman, the former chief risk officer for MF Global will testify this week in front of a Congressional panel. Roseman is said to have questioned the trading bets that ultimately led to the collapse and bankruptcy of MF Global. MF Global filed for bankruptcy on Oct. 31 after investors and customers became rattled over the firm's $6.3 billion bet on European sovereign debt.
The House Financial Services subcommittee will hold a hearing on Feb. 2 that Roseman will appear before. The subcommittee is exploring the roles that risk officers and rating agencies played in the collapse of MF Global.
Also testifying on Thursday will be Michael Stockman, who succeeded Roseman as chief risk officer for MF Global, as well as representatives from Standard and Poor's and Moody's Corp. The panel is studying the rating agencies and exploring their vigilance, as they did not significantly downgrade MF Global until shortly before or after bankruptcy was filed.
Roseman has not yet given his account of the risk taken by MF Global, but has become a figure of debate in the collapse. Former MF Global CEO Jon Corzine was questioned by the House Agriculture Committee in December about whether or not Roseman had voiced concerns about the firm being overexposed to European sovereign debt.
"Mr. Roseman certainly had a different view about the sovereign default risk associated with Euro sovereigns and particularly in the context that we did other business in those countries," Corzine testified. "He expressed that to me directly; he expressed that to the board."
House Ag Chairman Frank Lucas, R-Okla., asked Corzine during that hearing if he was involved in the decision to have Roseman leave MF Global in early 2011. Corzine said that the decision was made due to the belief that the firm needed someone with more knowledge about the side of MF Global business concerning broker-dealers.
As this moves forward more than $600 million in missing customer funds are still being searched for by investigators. They are probing whether MF Global inappropriately used that money for the firm's purposes.
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