Former New Jersey governor and MF Global CEO Jon Corzine will appear before the House Agriculture Committee on Thursday.
NEW YORK (CNNMoney) — After weeks of speculation about how more than a billion dollars in customer money went missing at MF Global, former CEO Jon Corzine will give his side of the story on Capitol Hill Thursday.
Corzine, also a former senator and governor of New Jersey, has been called to testify before the House Agriculture Committee as it investigates what went wrong at the brokerage firm, which went bankrupt in late October after disclosing bets on risky European debt that sparked a panic among investors.
More than $1.2 billion worth of MF Global () customer funds may be unaccounted for, according to the trustee overseeing the brokerage’s liquidation, a shortfall that has sparked investigations by the FBI and federal regulators. In Congress, the House Financial Services Committee and the Senate Agriculture Committee are investigating along with the House Agriculture Committee.
The case — the eighth-largest bankruptcy in U.S. history — has shaken faith in the markets and put business on hold for many owners of the roughly 38,000 securities and commodities trading accounts at the firm, from big-city traders to heartland farmers. Analysts believe MF Global may have unlawfully mixed customer money with its own, though no one at the firm has been formally accused of wrongdoing.
Corzine resigned from MF Global last month, but that hasn’t deterred scrutiny of his role in the firm’s collapse.
Both the House and Senate agriculture committees as well as a subcommittee of House Financial Services have voted to subpoena him. The Senate Agriculture and House Financial Services hearings are scheduled for next week.
Corzine had requested that the three committees move their hearings on MF Global to January — for logistical reasons and to allow sufficient time to prepare — at which point he would have voluntarily appeared, according to a source familiar with the matter. These requests were denied.
Corzine, who was also a former CEO at Goldman Sachs (Fortune 500), will give prepared testimony before the House Agriculture Committee on Thursday, committee spokeswoman Tamara Hinton said. He will also be subject to questioning from lawmakers, though he may invoke the Fifth Amendment and decline to answer questions.,
“We have no way of knowing the level of his participation beyond his prepared testimony,” Hinton said.
A lawyer for Corzine did not immediately return a request for comment; his spokesman declined to comment.
“What he has to weigh is the risk that he might say something which could be used against him in a criminal proceeding against the damage it could do to his reputation if he does take the Fifth,” said Jonathan Marks, a criminal defense lawyer and former federal prosecutor.
Corzine could also be liable for perjury if he says something before the committee that is later proven false.
The MF Global money chase
Particularly as a former public official, Corzine may feel compelled to offer his side of the story and avoid the spectacle of stonewalling lawmakers, as executives from bankrupt solar firm Solyndra did at a Congressional hearing in September. The two men — Brian Harrison and W.G. Stover — repeated a prepared statement invoking the Fifth Amendment in response to question after question from lawmakers.
With the criminal investigation of MF Global still pending, Corzine would be wise to do the same, said Michael Bachner, a defense attorney in New York City specializing in white collar crime. An invocation of the Fifth Amendment, he added, should not automatically be taken as an admission of guilt.
“Often times you can’t remember events and you may end up saying things that you regret,” Bachner said. “My opinion is that he would be better off asserting the Fifth, taking the public beating that he would get by not testifying, and waiting out the criminal investigation.”