Huffpost Business

Ex-MF Global Exec Edith O'Brien Pleads 5th Amendment At Hearing

Posted: Updated:

WASHINGTON — A former MF Global executive has refused to answer lawmakers' questions about $200 million that was transferred out of a customer account days before the firm collapsed, invoking her Fifth Amendment right against self-incrimination.

Edith O'Brien, a former assistant treasurer at MF Global, was subpoenaed to testify before the House Financial Services oversight subcommittee hearing about an email she sent, which appears to contradict testimony from Jon Corzine, the firm's then-CEO.

The email says Corzine ordered the transfer on Oct. 28 to cover an overdraft in the firm's bank account in London. The committee cited the email in a memo released last week.

"On the advice of counsel, I respectfully decline to answer based on my constitutional right," O'Brien responded to a question about the transfer.

Corzine testified in December that never directed anyone to use customer funds to fix the overdraft and he wasn't told that customer money was used.

MF Global filed for bankruptcy protection Oct. 31. The company failed after a disastrous bet on European debt. About $1.6 billion in customer money hasn't been recovered. Corzine, a former New Jersey governor and U.S. senator from the state, stepped down as CEO in November.

In addition to Congress, federal regulators and a federal grand jury in Chicago are investigating the MF Global failure.

No one has been charged in the case. If the firm misused client money, it would violate a fundamental investor protection for people who trade options and futures.

Other witnesses at the hearing are expected to offer details about the transfer that could challenge Corzine's previous statements.

A JPMorgan Chase executive submitted prepared testimony that says the bank asked Corzine for written assurances that the Oct. 28 transfer satisfied federal rules.

"Mr. Corzine said he understood the request and would have someone within his organization review it," Genova says in her testimony. She says JPMorgan received "multiple clear oral assurances" from senior MF Global executives that the firm complied with the rules in the transfer.

Also scheduled to testify at the hearing are Christine Serwinski, MF Global's chief financial officer for North America, MF Global Chief Financial Officer Henri Steenkamp and General Counsel Laurie Ferber.

Corzine testified before three congressional panels in December that he never instructed anyone at MF Global to misuse customer funds. He and Steenkamp have testified they didn't become aware of the shortfall in customer money until hours before the bankruptcy filing.

Around the Web

Live Blogging the Hearing on MF Global's Collapse

MF Global Hearing Preview, Corzine Testimony

MF Global owes Wall company $20.2M

Harsh Words as Lawmakers Kick Off MF Global Hearing

Banks Hold $1 Billion in MF Global U.K. Cash, KPMG Says

PhillipCapital to buy MF Global Indian unit