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May 18, 2012   |  Billings Gazette

Tester: Firings needed over commodities trading scandal

Billings Gazette

By: Tom Lutey

An investment scandal that cost farmers and ranchers more than $1.6 billion should cost the nation’s top commodities trade regulator his job, Sen. Jon Tester, D-Mont., said Friday.

Speaking about financial reforms with The Billings Gazette editorial board, Tester said Gary Gensler, chairman of the Commodity Futures Trading Commission, should be fired for the government’s role in the collapse of MF Global, a trading house accused of raiding customer accounts to cover bad investments in European sovereign debt. Legally, the customer accounts were “segregated” meaning they should have been off-limits.

MF Global failed despite the cash grab and last October filed a $42 billion bankruptcy, the eighth largest bankruptcy in U.S. history.

“CFTC was asleep at the switch. They were in the building when all that stuff went on, too. Maybe Gary Gensler needs to go,” Tester said.

MF Global is currently under criminal and civil investigation. At least three lawsuits seeking class action status, including one filed by Montana farmers, have also been filed.

Though no criminal charges have been filed, MF Global’s punishment should be severe, Tester said.

“From what I know about the issue, it’s pretty straight-forward. People need to go to jail over it,” Tester said.

Gensler has been accused of being asleep at the switch while accounts that should have been regulated were drained by MF Global. The CFTC chairman has also been accused of cronyism. Both Gensler and MF Global CEO Jon Corzine worked for Goldman Sachs. Corzine, a former Democratic senator and New Jersey governor, is alleged to have lobbied Gensler to delay financial reform rules affecting MF Global’s handling of customer accounts. And Corzine has become a liability for President Barack Obama, for whom Corzine raised $500,000 in campaign cash during the first quarter of 2011.

Last week, House Republicans wrote the Department of Justice asking that a special independent counsel be appointed to investigate MF Global. The letter, which Tester challenger Republican U.S. Rep. Denny Rehberg signed, calls for the outside investigator to restore trust and confidence, though it didn’t suggest Justice Department investigations into the case had been compromised by Corzine’s relationships.

Tester said outside counsel might be in order.

Office Contact Information

Senator Tester's Montana staff serves the state from offices in Billings, Bozeman, Butte, Great Falls, Helena, Kalispell, and Missoula. Please bring your concerns with federal agencies, academy nominations, and other situations to one of these Montana offices.

Billings

Judge Jameson Federal Building
2900 4th Ave N, Suite 201
Billings, MT 59101
Phone: (406) 252-0550
Fax: (406) 252-7768

Bozeman

Avant Courier Building
1 E Main Street, Suite 202
Bozeman, MT 59715
Phone: (406) 586-4450
Fax: (406) 586-7647

Butte

Silver Bow Center
125 W Granite, Suite 200
Butte, MT 59701
Phone: (406) 723-3277
Fax: (406) 782-4717

Great Falls

119 1st Avenue N, Suite 102
Great Falls, MT 59401
Phone: (406) 452-9585
Fax: (406) 452-9586

Helena

208 North Montana Avenue
Suite 104
Helena, MT 59601
Phone: (406) 449-5401
Fax: (406) 449-5462

Kalispell

8 Third Street E
Kalispell, MT 59901
Phone: (406) 257-3360
Fax: (406) 257-3974

Missoula

130 W Front St.
Missoula, MT 59802
Phone: (406) 728-3003
Fax: (406) 728-2193

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