Jon Corzine is expected Tuesday to once again distance himself from an estimated $1.2 billion in customer money that vanished when MF Global collapsed this fall.
This time, Corzine will have company.
Bradley Abelow, MF Global's president and chief operating officer, and Henri Steenkamp, the chief financial officer, are also scheduled to testify to the Senate Agriculture Committee.
All three say they don't know where the money is, according to prepared remarks and Corzine's previous testimony to a House panel last week. Nor do they take responsibility for authorizing the movement of money out of customer accoun.
Depending on the circumstances, transferring money from customers' accounts could violate securities laws and, in some cases, could amount to a crime. Federal authorities have begun criminal investigations. And regulators are looking into whether the firm broke securities rules.
MF Global collapsed into the eighth-largest bankruptcy in U.S. history on Oct. 31 after a disastrous bet on European debt. Corzine stepped down as CEO on Nov. 4.
Corzine told the House Agriculture Committee last week that he didn't know what happened to the money. He said he didn't become aware of the shortfall until Oct. 30, one day before the firm filed for bankruptcy protection.
In his prepared testimony, Steenkamp says he had no direct involvement in the transfer of funds.
"Direct involvement with operational matters such as bank accounts or fund transfers has never been part of my duties," Steenkamp says.
Abelow says he cannot explain what happened to the money without having access to MF Global documents, which a trustee now controls.
"At this time ... I do not know the answers to those questions," he says in his prepared testimony.
Anthony Sabino, a law professor at St. John's University in New York, said Steenkamp and Abelow "are in a riskier position" than Corzine because they were responsible for day-to-day operations of MF Global.
Tuesday's hearing will include an added element of drama because Corzine, a former Democratic senator from New Jersey, will be pressed by some senators he served with from 2000 through 2005.
The Senate panel is one of three congressional committees to have issued subpoenas to compel Corzine's testimony on the issue. It marked the first time a former senator has been subpoenaed by his former peers in more than 100 years, according to the Senate historian's office.
Many lawmakers have heard from farmers, ranchers and small business owners in their states who are missing money that was deposited with the firm. Agricultural businesses use brokerage firms like MF Global to help reduce their risks in an industry vulnerable to swings in oil, corn and other commodity prices.
Corzine, who also was New Jersey governor from 2006 until early 2010, told lawmakers last week that he never intended to authorize the transfer of funds from customer accounts. If any subordinates moved clients' money in the belief that Corzine had authorized it, "it was a misunderstanding," he said.
Along with Corzine, Steenkamp and Abelow have been sued in class-action complaints on behalf of MF Global shareholders. The lawsuits accuse the executives of making false and misleading statements about MF Global's financial strength and cash balances.
MF Global didn't list the European debt on its balance sheet for all to see. Instead, those holdings were shifted to the company's "off-balance sheet," deep in its financial statements. Some separate filings with regulators excluded the European debt entirely.
A lawyer for the trustee overseeing the liquidation of MF Global's brokerage operations said in court Friday that the trustee's staff has discovered some "suspicious" trades in MF Global customer accounts that were made in the last days before the firm failed. The lawyer didn't provide details.
Corzine said last week that customers' losses weigh heavily on him.
"I think about this every day," he said. "I could not be more regretful, more distressed that we are ruining people's lives."