“SNAP is essential in protecting the most vulnerable citizens during tough times, but we need to have a complete understanding of its mission and purpose.” That was the message from House Agriculture Committee Chairman K. Michael Conaway this week as the committee began its top-to-bottom review of the Supplemental Nutrition Assistance Program (SNAP), previously known as food stamps.
House Agriculture Committee Demands Facts on MF Global Collapse
Tamara Hinton, 202.225.0184
WASHINGTON – Today, the House Agriculture Committee held a public hearing to examine the MF Global bankruptcy and reports that as much as $1.2 billion in customer funds have gone missing. The disappearance of customer funds from MF Global has badly shaken the trust that farmers, ranchers, and businesses across America place in futures trading.
Farmers and ranchers rely on futures markets to smooth price volatility and manage the risks that are inherent to production agriculture. Businesses have confidence in futures investments because of a protection that ensures that customer funds used to guarantee trades must be segregated from the broker’s funds. This separation of funds protects customers’ margin in the event that their trader defaults or files for bankruptcy.
The hearing marked the first public comments about the circumstances surrounding the bankruptcy from MF Global’s former CEO, Jon Corzine.
Members questioned Corzine and other witnesses about the events leading up to the bankruptcy and the whereabouts of customer funds.
"Today’s hearing was an effort to get answers for the constituents impacted by MF Global’s collapse. Former MF Global CEO Jon Corzine’s presence was critical to our objective, and unsurprisingly, we are finding that there are still more questions than answers about the missing customer funds. There is a great deal more to learn if we are to restore confidence in the futures markets. Ultimately, our primary focus is ensuring MF Global’s customers have their money restored. This hearing was the first step in that process, but it will not be the last," said Chairman Frank Lucas.
"The Agriculture Committee's oversight of the futures and derivatives markets is a responsibility that I do not take lightly. Wall Street, apparently not content to sully its own reputation, has now stained our well-run futures markets by apparently violating the supreme law - protection of customer funds. At the Agriculture Committee we are focused on the facts. It is the facts that will tell us what happened, who knew about it, and consequently, who was responsible. Only by uncovering the facts, can we prepare ourselves for policy responses that are necessary to address what has happened," said Ranking Member Collin Peterson.
Written testimony provided by the witnesses is linked below.
- The Honorable Jill Sommers, Commissioner, Commodity Futures Trading Commission, Washington, D.C.
- Mr. James Kobak, Lead Counsel for the Trustee for the Liquidation of MF Global Inc., New York, New York
- The Honorable Jon Corzine, Former CEO, MF Global Inc., New York, New York
- Mr. John Fletcher, General Manager, Central Missouri AGRIService LLC, on behalf of the National Grain and Feed Association, Marshall, Missouri
- Mr. Terrence Duffy, Executive Chairman, CME Group, Inc., Chicago, Illinois
- Mr. William J. Brodsky, Chairman and CEO, Chicago Board Options Exchange, Chicago, Illinois
- Mr. Dan Roth, President and CEO, National Futures Association, Chicago, Illinois
- Mr. Stephen Luparello, Vice Chairman, Financial Industry Regulatory Authority, Washington, D.C.
- Mr. Gerry Corcoran, Chairman and CEO, R.J. O’Brien & Associates, on behalf of the Commodity Markets Council, Chicago, Illinois