WASHINGTON, Jan 27 (Reuters) - Michael Roseman, the
former chief risk officer who is said to have raised red flags
about aggressive trading bets at MF Global, will testify before
Congress next week, according to a congressional staffer
familiar with the matter.
Roseman will appear on Feb. 2 before a House Financial
Services subcommittee, which is exploring the role that ratings
agencies and risk officers played in the collapse of the futures
brokerage MF Global.
Michael Stockman, who succeeded Roseman as chief risk
officer for MF Global, will also testify, along with
representatives from Standard and Poor's and Moody's Corp, the
congressional staffer said.
MF Global filed for bankruptcy on Oct. 31 after investors
and customers became rattled over the firm's $6.3 billion bet on
European sovereign debt.
Lawmakers are studying the vigilance of the ratings
agencies, which did not significantly downgrade MF Global until
just days before, or hours after, it filed for bankruptcy.
Meanwhile, investigators are still searching for more than
$600 million in missing customer funds, and are probing whether
MF Global inappropriately used that money for the firm's
purposes.
Roseman has become a figure of debate about the MF Global
collapse, but has not yet publicly given his account of the
firm's risk-taking.
Lawmakers at a House Agriculture Committee hearing in
December questioned former MF Global Chief Executive Jon Corzine
over whether Roseman voiced concerns about the firm being
overexposed to European sovereign debt.
Corzine replied: "Mr. Roseman certainly had a different view
about the sovereign default risk associated with Euro sovereigns
and particularly in the context that we did other business in
those countries, and he expressed that to me directly. He
expressed that to the board."
House Agriculture Committee Chairman Frank Lucas also
pressed Corzine about whether he was involved in the decision to
have Roseman leave his post in early 2011.
Corzine said he believed the firm needed someone who had
more knowledge with the broker-dealer side of MF Global's
business, and that there were personnel issues.
"There were other issues about how people worked with each
other. Not with me in particular, but within the firm that led
the board and my agreement to that, that we should change chief
risk officers," Corzine told the December hearing.
A representative for MF Global declined comment. S&P
spokesman David Wargin declined to comment. Moody's was
unavailable for immediate comment. Contact information for
Roseman could not immediately be obtained.
(Reporting By Alexandra Alper)
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