The WSJ is reporting that Jon Corzine, "who resigned as chairman and CEO of MF Global after its Oct. 31 bankruptcy filing [and also] is a former U.S. senator and governor of New Jersey" testified before Congress that:
"I simply do not know where the money is," he said, noting that "there were an extraordinary number of transactions during MF Global's last few days."
As Marcia Narine tweeted:
Watching ex-governor/ex-senator Corzine testify that he doesn't know where MF Global client money went- better than reality TV- #corpgov
Given the legal responsibility CEOs have for maintaining adequate internal controls over accounting practices, it's a stunning admission of failure. It not only raises the question of why he didn't keep track of $1.2 billion in client funds, not to mention why he was unaware that segregation of client and firm funds had broken down, but also why he allowed the volume of transactions to become so chaotic as clients tried to get their money back. It implies a total break down in internal controls, raising the question of whether the firm ever had adequate internal controls in the first place.
It's also worth noting Corzine's willingness to testify without invoking his Fifth Amendment right to remain silent, Doug Mataconis points out that it may come back to haunt him:
From a public relations point of view, I’m not sure pleading ignorance is the best way to go. It’s also not exactly a defense to any potential criminal actions that Corzine might be subject to in the future. Which is why the fact that he is even testifying to begin with surprises me. The most obvious charge that Corzine opens himself up to today is perjury. As Roger Clemens is learning, any discrepancy between what he says under oath and what the investigation revealed could be a problem for him.
Indeed. The ultimate irony would be if Corzine went to jail for lying to Congress rather than for any misfeasances or malfeasances he committed at MF Global.