House Panel Weighs Corzine Subpoena in MF Hearing

WASHINGTON—The House Agriculture Committee is considering subpoenaing Jon Corzine, the former chief executive of failed broker-dealer MF Global Holdings Ltd., to compel him to testify at a Dec. 8 hearing before the panel, people familiar with the meeting said.

The committee said late Thursday that it would meet Friday morning to "consider the issuance of a subpoena to compel the attendance of a witness at the subsequent hearing to examine the MF Global bankruptcy."

Committee Chairman Frank Lucas (R., Okla.) said the committee hadn't received confirmation of attendance from all witnesses invited to the hearing, but didn't name Mr. Corzine specifically.

"Due to the wide ranging and devastating impact this bankruptcy has had on many of our constituents, the Ranking Member and I believe it is critical for the committee to examine all facts and circumstances that led up to the bankruptcy and subsequent efforts to recover customer funds," Rep. Lucas said in a statement.

A spokesman for Mr. Corzine, a former New Jersey governor and former chairman of Goldman Sachs Group Inc., declined to comment.

The subpoena possibility comes as senators questioned regulators at a hearing Thursday about their oversight of MF Global and the entire futures industry.

Senators asked whether MF Global should have disclosed more of the risk that it was taking with bets on European debt and whether changes are needed to accounting rules, specifically repurchase agreements that are currently not required to be disclosed on a firm's balance sheet.

Securities and Exchange Commission Chairman Mary Schapiro said that the SEC was investigating the accounting at MF Global and looking into whether changes need to be made to the way repurchase agreements are disclosed.

"MF Global's collapse has shattered the faith of many who use the futures markets," said Sen. Debbie Stabenow (D., Mich.), chairman of the Senate Agriculture Committee. Ranking member Sen. Pat Roberts (R., Kan.) said that regulators have to find out what happened at MF Global "in a manner that restores faith in the futures market."

The Commodity Futures Trading Commission is leading the regulatory probe into the estimated $1.2 billion in funds missing from customers' accounts. Chairman Gary Gensler, who has recused himself from the investigation because of his ties to Mr. Corzine from their time together at Goldman Sachs, said that the CFTC is broadly re-examining the agency's oversight of the futures industry, including its reliance on self-regulatory organizations. "We know that this has to be better," Mr. Gensler said.

The CFTC will vote Monday on a rule to limit how firms such as MF Global can invest customer funds, he said, though it isn't yet clear that imprudent investment was the cause of any missing funds at MF Global.

In addition to the House Agriculture Committee hearing on Dec. 8, the Senate Agriculture committee is holding another hearing on MF Global on Dec. 13 to which Mr. Corzine has been invited. The House Financial Services Committee has also invited Mr. Corzine to a hearing on Dec. 15.

Separately, Sen. Richard Shelby (R., Ala.) requested a report on regulators' oversight and regulation of MF Global from the internal watchdog at the Commodity Futures Trading Commission, the firm's main regulator.

"The fact that all of [MF Global's] customer funds cannot be accounted for raises serious public policy concerns," Sen. Shelby said in a letter addressed to the CFTC Inspector General Roy Lavik.

Also, a consortium of farmer, producer and commodities groups called for a congressional review of futures market practices that appear to have failed former clients of the collapsed broker-dealer.

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