Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesHot NewsMost Read NewsRecomm.Business LeadersCalendar 

MF Global risk officer says ousted after warnings

share with twitter share with LinkedIn share with facebook
share via e-mail
0
02/02/2012 | 06:50pm CEST

The former chief risk officer at MF Global who raised red flags about the firm's aggressive trading bets told lawmakers that his warnings contributed to the firm's decision to let him go in early 2011.

Michael Roseman, who was ousted in January 2011 from the now-bankrupt futures brokerage, said he rang alarm bells about the firm's exposure to European sovereign debt a year before the firm collapsed in late October of 2011.

"My views on risk certainly played a factor in that decision," Roseman told a House Financial Services subcommittee, about why he was asked to leave the firm.

Before MF Global's collapse, then Chief Executive Jon Corzine pushed the firm to take on a more aggressive trading strategy, including a $6.3 billion dollar bet on European debt, executed through repo-to-maturity transactions.

Corzine, once CEO at Goldman Sachs and a former New Jersey governor and U.S. senator, also was pushing the futures brokerage to evolve into something closer to an investment bank.

Roseman said such a strategy required a lot of capital and a lot of liquidity, two things that ran out at the firm.

"I do think the strategy maybe exceeded the ability of the resources," he said.

MF Global filed for bankruptcy after investors and customers began to flee, alarmed by the firm's massive bet on European sovereign debt. Investigators are still trying to find more than $600 million in missing customer money, including money in the accounts of hundreds of farmers.

Lawmakers are holding a series of hearings to determine whether MF Global was transparent about its risk-taking, and whether regulators should have reined the firm in and better protected customer money.

Roseman appeared alongside Michael Stockman, who was brought in to replace him as chief risk officer.

Lawmakers pressed Stockman if he was brought in as a "yes" man, after Roseman got ousted following his warnings to Corzine and the board.

"Did you ever think that maybe they ran off Mr. Roseman and brought you in to be kind of the guy that doesn't see, tell, know? Did that ever occur to you?" Republican Steven Pearce asked Stockman.

Stockman replied, "No sir."

Pearce also laid into Stockman about his testimony that he was "deeply saddened" by MF Global's collapse and its impact on shareholders and customers.

"Have you suggested that maybe you ought to give your pay back and put it into a scholarship fund for these kids that aren't going to go to college? Sitting out there, some hog farmer who is trying to make ends meet. My dad raised pigs. I know what it's like. He's trying to pay for the next sack of feed," Pearce said.

Stockman was reluctant to speculate on what specifically doomed MF Global.

Roseman, however, said MF Global would have been on a very different path if it had not ramped up its European debt exposure.

"In my opinion, they would still be here," Roseman said.

Representatives from credit rating firms Standard and Poor's and Moody's Corp are due to testify later on Thursday.

(Reporting By Sarah N. Lynch and Karey Wutkowski; Editing by Tim Dobbyn)

By Sarah N. Lynch and Karey Wutkowski

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news
Date Title
10:43a AXEL SPRINGER : Brexit could make Britain highly attractive, says Axel Springer chief
10:42a CREDIT SUISSE : on track for 2016 job cuts - CEO
10:42a NETCALL : Wins New Contract But Profit Dips On Revenue Decline
10:42a REDDE PLC : - Holding(s) in Company
10:42a Global Dental Surgical Equipment Strategic Business Report 2016 - Annual Estimates & Forecasts 2015-2022
10:41a DGAP-AFR : Odeon Film AG: Vorabbekanntmachung über die Veröffentlichung von Finanzberichten gemäß § 37v, 37w, 37y WpHG
10:41a DGAP-AFR : Odeon Film AG: Preliminary announcement of the publication of financial reports according to Articles 37v, 37w, 37y of the WpHG
10:40a INDUSTRIAL AND FINANCIAL IFS : EQT acquires Elliott’s shares in IFS
10:40a INDUCTORS : Lineup of rugged power inductors for automotive electronics applications expanded
10:40a COMMONWEALTH SECRETARIAT : Prime Minister of Grenada salutes Commonwealth anti-corruption agenda
Latest news
Advertisement
Hot News 
-3.56%WOLSELEY : to cut up to 800 jobs in Britain
3.01%CARNIVAL : Boosts Guidance as Its Profit Increases 17% -- WSJ
-0.67%A G BARR : AG Barr to cut about 10 percent of workforce, on track to cut sugar content
0.66%Business Watch -- WSJ
0.44%ORIENT SECURITIES : China's Orient Hontai spends $1.4 billion for majority stake in AppLovin
Most Read News
09/26 Disney, Microsoft among possible Twitter suitors
02:34a WELLS FARGO : U.S. Labor Department launches review of all Wells Fargo complaints
02:49a SAMSUNG ELECTRONICS : recovers over 60 percent of recalled Note 7s in South Korea, U.S.
09/26 AmEx can bar merchants from steering card customers elsewhere
09/26 VERIZON COMMUNICATIONS : U.S. senator seeks SEC probe of Yahoo disclosure on hacking
Most recommended articles
09/26Predicting the U.S. Elections With The WMA Trump/Clinton Barometer
04:43a AXEL SPRINGER : Brexit could make Britain highly attractive, says Axel Springer chief
04:26a VOSSLOH : Deutsche Bahn manager to become CEO of Vossloh - industry sources
04:17aDJLONDON MARKETS : FTSE 100 Rises As Investors Find Hope In Clinton-Trump Debate
04:16aDJNEWS HIGHLIGHTS : Top Energy Stories of the Day