* Customer group wants to question MF executives under oath
* Judge denied similar request in February
* MF Chief Operating Officer Bradley Abelow resigning
By Nick Brown
NEW YORK, Nov 26 A group of former MF Global
customers on Monday asked a court for permission to subpoena the
commodities broker's executives, including former CEO Jon
Corzine, who was blamed in a congressional report this month for
MF Global's collapse.
The Commodity Customer Coalition, an advocate for trader
customers who lost money when MF Global went under, is seeking
to subpoena Corzine, Chief Financial Officer Henri Steenkamp,
Chief Operating Officer Bradley Abelow and others, according to
court papers filed in the U.S. Bankruptcy Court in Manhattan.
While Corzine has stepped down, some executives remain at
the company, assisting in its wind-down. Abelow, the
highest-ranking executive still at the firm, just last week gave
his notice and is leaving at the end of the week, a person
familiar with the matter told Reuters on Monday.
MF Global went bankrupt in October 2011 after its
heavy exposure to European sovereign debt spooked investors. The
case has become a political firestorm as investigators in
Congress and elsewhere try to identify the source of an
estimated $1.6 billion hole in customer trading accounts.
Corzine's role has been unclear. James Giddens, the trustee
liquidating MF's broker-dealer unit, said in a June report that
Corzine failed to address growing liquidity needs as he built
the firm into a global investment powerhouse.
Giddens said MF Global used customer funds to cover
liquidity gaps as the firm teetered on the brink.
More recently, the Republican-controlled House Financial
Services Committee put the blame squarely on Corzine, saying in
a Nov. 15 report that he failed to maintain the controls
necessary to protect customer funds.
Corzine, a former co-chairman of Goldman Sachs who
also served as a Democratic U.S. senator and governor of New
Jersey, has denied any wrongdoing.
Reuters reported in September that prosecutors are close to
wrapping up a criminal inquiry and are unlikely to file criminal
Some customers have sued Corzine for civil charges,
including breaching fiduciary duty.
The coalition is also seeking to subpoena MF Global General
Counsel Laurie Ferber and former Treasurer Edith O'Brien, as
well as Christine Serwinski, former finance chief at MF's North
An attorney for O'Brien declined to comment. Lawyers for the
other parties did not respond to requests for comment.
James Koutoulas, a fund manager who leads the coalition, on
Monday told Reuters that Corzine should be forced to face
questions from customers under oath.
A spokesman for Corzine declined to comment.
Judge Martin Glenn, who is overseeing MF Global's
liquidation, in February denied a similar subpoena request from
another former MF Global customer, saying it would impede
ongoing investigations by authorities.
Many officials, including Giddens, the Department of Justice
and the FBI, have been investigating the case and have spoken to
MF Global executives.
Giddens' role -- to return as much money as possible to
former customers -- raises questions as to whether granting the
coalition subpoena power could be redundant.
Giddens has already returned to customers about 80 percent
of the money in their accounts, which were frozen when the
company went bankrupt. He has said he will try to recover much
of the roughly $1.6 billion gap in those accounts through
litigation or settlements with MF Global affiliates, regulators
Giddens has also joined forces with plaintiffs who have sued
Corzine for alleged civil infractions.
Still, Koutoulas says customers should be able to take
matters into their own hands and ask Corzine and fellow brass
detailed questions about the firm's collapse.
"This case needs another kick in the butt," Koutoulas said.
"It's almost like the courts are treating Corzine as a sacred
cow that can't be touched."
Kent Jarrell, a spokesman for Giddens, declined to comment
on the coalition's subpoena efforts. He said Giddens "stands by"
his June report and will continue to cooperate with plaintiffs
in civil lawsuits against Corzine.