Members of the Senate Agriculture Committee told the trustee, former FBI director Louis Freeh, in the letter that it would be "outrageous" to proceed with a proposal to a bankruptcy judge that could result in payouts of hundreds of thousands of dollars each for MF Global's chief operating officer, finance chief and general counsel. All three were at MF Global when it tumbled into bankruptcy protection and an estimated $1.6 billion went missing from customer accounts.
The letter, written by Sen. Debbie Stabenow (D-Mich.), the panel's chairwoman, was signed by all 21 Democrats and Republicans on the committee.
A spokeswoman for Freeh referred to a letter he sent Mar. 12 to another senator in which Freeh said he hadn't made any decisions on the bonuses or their amounts, and hadn't yet filed court papers requesting them. The bankruptcy court and a Justice Department representative monitoring MF Global's case, among others, will have an opportunity to weigh in on any bonus proposal when it is made, and the court would ultimately have to approve it, he added.
The backlash comes after The Wall Street Journal reported last week that Freeh planned to ask the bankruptcy judge in charge of MF Global's case to approve potential bonuses for Bradley I. Abelow, Henri J. Steenkamp and Laurie R. Ferber. They were lieutenants of former Chairman and CEO Jon S. Corzine, the former Goldman Sachs Group chairman and New Jersey governor whose bets on bonds of troubled European countries led to a run on MF Global last fall. He resigned in November right after MF Global sought bankruptcy protection.
Federal prosecutors, regulators and other investigators are still trying to uncover what happened to funds that went missing from MF Global customer accounts.
To read more, go to The Wall Street Journal
MF Global Holdings Ltd., FBI director Louis Freeh, MF Global, Senate Agriculture Committee, bankruptcy protection, Henri J. Steenkamp, Laurie R. Ferber, bankruptcy judge, Debbie Stabenow