Published March 21, 2012
A congressional subcommittee voted on Wednesday to issue a subpoena to a key employee of MF Global Inc, the futures-trading firm whose collapse in October triggered ongoing inquiries into the disappearance of more than $1 billion of customer money.
The employee, Edith O'Brien, served as an assistant treasurer in the firm's Chicago office.
The decision to subpoena O'Brien means she will likely have to appear at a congressional hearing on MF Global <MFGLQ.PK> to be held on March 28.
Her insights into the complex tangle of money transfers could shed more light on the final days of MF Global, as the firm, led by former U.S. senator and New Jersey governor Jon Corzine, struggled to meet its trading commitments and save itself from bankruptcy.
During those chaotic days, the firm appears to have tapped futures accounts belonging to its customers, funds that are required by law to be held strictly segregated from the firm's own money, according to regulators investigating the firm.
The investor and counterparty panic was triggered by MF Global's large bet on European sovereign debt.
O'Brien hasn't been accused of any wrongdoing, and she could choose to invoke her right against self-incrimination.
Her reluctance to testify voluntarily was what prompted the investigations subcommittee of the House Financial Services Committee to vote on Wednesday to issue the subpoena.
O'Brien's lawyer couldn't be reached for comment.
"After reviewing thousands of documents and interviewing former MF Global executives and regulators as part of our investigation, the Subcommittee has concluded that Ms. O'Brien has unique, personal knowledge regarding how and why customer funds went missing," said the subcommittee's chairman, Randy Neugebauer.
At the March 28 hearing, lawmakers are also likely to question several other former MF Global employees, who are expected to appear voluntarily.
The witness list is still being finalized. The hearing is the latest in a series of congressional efforts to grill former senior managers of MF Global.
Former Chief Executive Jon Corzine, Chief Financial Officer Henri Steenkamp and Chief Operating Officer Bradley Abelow have all testified to Congress, and disavowed any intent to misuse customer funds and any specific knowledge of how that misuse may have occurred.
They haven't been formally accused of any wrongdoing.
Criminal and civil inquiries into MF Global's collapse are under way. Nearly five months after they began, investigators haven't yet uncovered any publicly known evidence of criminal fraud or wrongdoing.