House Republicans Expected to Call for Independent Counsel to Investigate MF Global Failure

By Peter Barnes
May 02, 2012

A Republican member of the House Financial Services Committee is circulating a letter in Congress that calls for the appointment of an independent counsel to investigate the failure of MF Global.

Investigators and a bankruptcy trustee are trying to locate and recover a $1.6 billion shortfall in MF Global customer funds. The firm filed for bankruptcy last October after making risky bets on European debt.

Rep. Michael Grimm (R-NY), a former FBI agent who investigated Wall Street for financial fraud, began circulating the letter today, according to sources familiar with the matter. Other House members, mainly Republicans, are expected to sign on, with formal release of the letter planned for next week when Congress returns from its current recess.

Among other things, sources said, the letter is designed to address allegations of conflict of interest in the ongoing investigations of MF Global, including one by the Commodities Futures Trading Commission.

CFTC chairman Gary Gensler is a former executive of Goldman Sachs where he worked with former MF Global CEO Jon Corzine. Gensler has recused himself from his agency’s probe into MF Global.

Also, President Obama’s re-election campaign disclosed last month that Corzine is a top fundraiser for the President, a so-called “bundler...”