Tester gets to heart of MF Global ‘debacle’
Senator demands bankruptcy trustees protect Montana farmers and ranchers
(U.S. SENATE) – In the wake of the eighth largest bankruptcy in American history, Senator Jon Tester is holding top officials’ feet to the fire to prevent Wall Street bankers from jeopardizing Montana farmers’ and ranchers’ savings ever again.
MF Global, which traded in commodities markets, lost the assets of hundreds of American farmers and ranchers when it declared bankruptcy in October. Bankruptcy officials are working to distribute remaining funds to customers, including numerous Montanans.
Tester, the Senate’s only active farmer and a member of the Senate Banking Committee, wants to know how the brokerage firm’s executives could break investment law to put farmers’ and ranchers’ money at risk.
“Are you at a point where you can say where the system failed and who didn’t do their job?” Tester asked bankruptcy trustee James W. Giddens at a Senate Banking Committee hearing today.
“What about those folks who aren’t made whole, the little guys?” Tester also asked.
Giddens told Tester that in hindsight more frequent reporting and making senior executives more “personally liable for shortfalls in customer funds” would incentivize better fund management.
Tester also received confirmation from Louis Freeh, MF Global’s bankruptcy trustee, that former MF Global executives would not receive “performance-related” bonuses. Tester previously told Freeh that any proposal to award bonuses of several hundred thousand dollars to the brokerage firm’s former top executives was “outrageous.”
“I don’t want to give any benefits to anyone that caused this debacle. Are you confident that’s the case?” Tester asked Freeh.
“I’m confident that’s the case,” replied Freeh. “Bonuses are not part of the consideration now or in the future.”
"Montana's hard-working farmers lost millions of dollars due to MF Global's collapse," said Montana Grain Growers President Brian Eggebrecht. "We appreciate Senator Tester fighting for answers on our behalf and standing up for rural America."
Video of Tester’s Senate Banking Committee hearing is available online HERE.