Alternative Market Briefing

MF Global Congressional hearing about what was not said

Thursday, March 29, 2012

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Henri Steenkamp By Mark Melin, Opalesque’s Chicago-based editor of OFI and OFS.

Washington DC -- In many ways, Wednesday’s House Financial Services subcommittee hearing was as much about what was not said than what was said.

Much of the attention was focused on MF Global assistant treasurer Edith O’Brien and her widely anticipated move of declining to answer questions during the hearing. While O’Brien was up-front about not answering questions, the remaining panelists generally answered questions as if they had pleaded "the fifth."

In a contest for the most absurd answer of the hearing, MF Global chief financial officer Henri Steenkamp may be the winner. When asked about the historic money transfers in the final week of existence, Mr. Steenkamp claimed he was unaware of fund transfers due to his "global role" and he was engaged in "other serious matters" that apparently took his attention away from the draining of $1.6 billion in assets from the firm. While the transfers were initially painted as due to "chaos" and implications were made that money vanished due to clerical errors, many question how $1.6 billion in cash – an amount in excess of MF Global’s total liquidation value at the time – could have escaped the notice of top executives. In fact, it was noted in testimon......................

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