An estimated $1.2 billion disappeared as the securities brokerage firm MF Global went belly up.
Jon Corzine, who resigned as the firm's chief executive officer a few days after it filed for bankruptcy protection on Oct. 31, said he's unsure exactly what happened.
It has been alleged that funds from customer accounts were misused by being transferred to MF Global's own accounts. The company then apparently bet on risky European sovereign debt -- and the gamble proved costly.
"I simply do not know where the money is," Corzine said.
Many MF Global accounts have been frozen. That has upset farmers with accounts used to secure futures contracts. Prices for crops and livestock can drop or rise dramatically from season to season, and locking into a commodity's price through a futures contract is usually considered a way to play it safe. But some farmers who had accounts with MF Global are out tens of thousands of dollars -- or more.
I'm concerned because Ohio's Second Congressional District, which encompasses seven counties, includes a lot of agricultural areas.
The House Agriculture Committee, on which I serve, is looking into what reportedly is one of the largest bankruptcies in U.S. history.
The committee subpoenaed Corzine to testify about what happened. On Thursday (Dec. 8), I and other House members were able to question him about the swift collapse of MF Global.
"How do you explain taking a 230-year-old company into bankruptcy within 18 months?" I asked.
Corzine, a former U.S. senator and Democratic governor of New Jersey, replied: "Sitting here today, with the knowledge that the market has drawn the conclusion it has drawn, and the facts (being) what they are, it would have been better to have taken different judgments."
In short, somebody screwed up.
"Your answers sound so nice, but you (risked) people's money without their knowledge in a (European sovereign debt) market I wouldn't invest in," I told him.
Regulators are looking into possible wrongdoing. Records will have to be scrutinized to figure out exactly what happened.
Some of the money that farmers had entrusted to the company might be returned to them, but there is no guarantee -- and it could take a long time. Lawyers likely will have to hash out who would be first in line to get any money back.
Many farmers have been left angry, confused, or discouraged.
There are no easy answers.
But I can -- and will -- continue to ask hard questions to try to get to the bottom of this financial mess.