By Karey Wutkowski, Sarah N. Lynch and Emily Stephenson
WASHINGTON, Nov 14 (Reuters) - Poor management decisions by
MF Global's former CEO Jon Corzine triggered the brokerage
firm's collapse, while lax protections for customer funds
contributed to the loss of an estimated $1.6 billion of customer
money, U.S. congressional investigators have determined.
Evidence unearthed by the House Financial Services
Subcommittee on Oversight puts the blame squarely on Corzine,
the panel's chairman Rep. Randy Neugebauer, said in a preview of
the report that will be released on Thursday.
"The responsibility for failing to maintain the systems and
controls necessary to protect customer funds rests with
Corzine," the report says. "This failure represents a
dereliction of his duty as MF Global's chairman and CEO."
Corzine, a former co-chairman of Goldman Sachs who also
served as a U.S. senator and as governor of New Jersey, has
denied any wrongdoing.
MF Global filed for bankruptcy more than a year ago, as
investors scrambled to pull out funds after revelations the firm
bet heavily on European sovereign debt and after credit
downgrades.
Regulators, prosecutors and lawmakers have been looking into
the estimated $1.6 billion in customer funds revealed to be
missing after the firm's collapse.
The House subcommittee said it has held three hearings,
interviewed more than 50 witnesses and reviewed thousands of
documents from MF Global, its regulators and other sources.
The report will show that risks were exacerbated by an
atmosphere at the firm in which no one could question Corzine's
decisions, the subcommittee said.
Corzine also kept his own trading activities out of the
firm's risk management review process, the subcommittee said.
The group said it also found that regulatory agencies had not
shared crucial information with each other, and other problems.
A trustee liquidating the company's broker-dealer unit
released a critical report in June that said that in his attempt
to build the firm into a global investment powerhouse, Corzine
failed to address growing liquidity needs.
A spokesman for Corzine did not immediately respond to a
request for comment.
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