Jon Corzine doesn't know where the $1.2 billion lost by MF Global went, according to the prepared testimony he's planning to give at a House panel on Thursday, in which he says he'll try to answer regulators' questions without invoking the Fifth Amendment as had been expected. Basically, he's telling the House Agriculture Committee "I don't know" instead of "I won't tell you." His testimony explains that the brokerage firm he headed after leaving the Senate placed outsize bets on European debt, and that when regulators challenged its accounting, it couldn't raise enough cash to satisfy them, nor its investors (but we pretty much already knew that). What's making headlines Thursday morning, is the extent to which Corzine says he doesn't know what happened to the firm's assets. From testimony:
I simply do not know where the money is, or why the accounts have not been reconciled to date. I do not know which accounts are unreconciled or whether the unreconciled accounts were or were not subject to the segregation rules. Moreover, there were an extraordinary number of transactions during MF Global’s last few days, and I do not know, for example, whether there were operational errors at MF Global or elsewhere, or whether banks and counterparties have held onto funds that should rightfully have been returned to MF Global.
Corzine says he wants to answer representatives' questions -- "it is appropriate that I attempt to respond to your inquiries," his prepared testimony says -- but he appears to be positioning himself to limit the amount of information he'll give. New York University law professor Stephen Gillers suggested to CBS that Corzine might still take the Fifth. "He can't begin to answer substantive questions," Gillers said.