Records Reveal Contact Between Corzine and the Fed in MF Global’s Final Days

James Rosen

…MF Global documents and telephone and email records obtained by Fox News show that on the morning of Oct. 26 — not even a full day after the optimistic statement he released — Corzine was contacting top officials at the Federal Reserve Bank of New York, including New York Fed President William C. Dudley. The records, supplied to congressional investigators by the New York Fed, show that over the next five days — at which point MF Global filed for bankruptcy protection– Corzine and Dudley spoke at least 10 times, and exchanged emails twice. There were still other contacts between Corzine, MF Global CFO Henri Steenkamp, and other New York Fed officials in the same time frame.

Jack Gutt, a spokesman for Dudley, said the New York Fed had no comment. But sources with knowledge of the substance of these conversations told Fox News that Corzine already knew MF Global’s collapse was imminent, and had reached out to Dudley for two reasons: first, to see if the Fed could help find a buyer for MF Global; and second, to assist the Fed in its efforts to minimize the fallout from what both men now realized was shaping up as a Wall Street catastrophe, the eighth largest bankruptcy in American history.

Today, investigators for the House Financial Services Committee are poring over MF Global documents, records from the Commodity Futures Trading Commission (CFTC), and the Securities and Exchange Commission (SEC), as well as the phone, email and fax records supplied by the New York Fed, to determine whether Corzine, in his optimistic statement of Oct. 25, was intentionally misleading investors and regulators…

…At Thursday’s Senate hearing, Corzine and his top deputies at MF Global — firm president Bradley Abelow and CFO Henri Steenkamp — all denied any knowledge of what happened to the missing funds, as well as any responsibility for the firm’s failure to maintain strict segregation between client and firm accounts.

However, the same panel heard testimony by Terry Dufffy, an executive of the Chicago Mercantile Exchange (CME), on which MF Global traded, alleging that Corzine may have known about a $175 million loan to a company affiliate in London using customer funds. Duffy said that hours before MF Global went bankrupt, an employee of the firm told regulators and a CME auditor that Corzine knew about the loan. This will provide another area of questioning for the Neugebauer panel on Thursday.

Fox News has learned that the House Financial Services panel has quietly interviewed more than a dozen individuals, including officials from CFTC, the SEC, and the CME, as well as the last two risk officers at MF Global…

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