03/26/2012 07:49 pm ET Updated May 26, 2012

Laurie Ferber, MF Global Exec, Said Didn't Know The Seriousness Of The Customer Shortfall Until Final Hours

* General counsel Ferber to testify on Wednesday

* Says unaware of irreconcilable shortfall until final hours

* Says resisted JPM compliance request because too broad

* Does not speculate on why customer funds still missing

WASHINGTON, March 26 (Reuters) - The general counsel of bankrupt futures brokerage MF Global will tell lawmakers she was not aware of the seriousness of a shortfall in customer accounts until the firm's final hours.

Laurie Ferber, in prepared testimony to be delivered on Wednesday, also said she resisted having an MF Global Holdings Inc employee sign off on a document assuring JPMorgan Chase & Co that fund transfers were proper because the request was too broad.

Ferber is due to testify before a House Financial Services Committee, which is holding its third hearing into the collapse of the firm on Oct. 31 and the ongoing search for roughly $1 billion in missing customer money.

Ferber, who has not previously spoken publicly about the firm's chaotic final days, will appear alongside other executives, including Chief Financial Officer Henri Steenkamp, Assistant Treasurer Edith O'Brien and Christine Serwinski, MF Global's chief financial officer for North America.

Diane Genova, deputy general counsel for JPMorgan, is also due to testify.

In her prepared remarks released on Monday, Ferber said she was copied on emails on Oct. 30 that indicated there was a shortfall in customer accounts estimated at anywhere from $3 million to $952 million.

"I do not recall when I saw these emails, but I understood that the finance team was looking for an adjustment and support to eliminate the deficit," Ferber said.

She said she did not learn until shortly before midnight on Oct. 30 that the firm might not be able to reconcile the segregated customer accounts.

Ferber did not speculate on why there was a shortfall.

MF Global filed for bankruptcy on Oct. 31 after investors and customers became rattled over the firm's $6.3 billion bet on European sovereign debt.

The ensuing search for missing money has sent reverberations through the farm belt and trading floors and has attracted the attention of the FBI and federal prosecutors.

Congressional and regulatory officials have been investigating whether customer funds were improperly transferred as the firm desperately searched for cash and what executives knew about the status of various accounts.

No one has been formally charged with any wrongdoing.

Ferber also testified about JPMorgan's request regarding two transfers: a $200 million transfer from an MF Global customer account to a house account on MF Global's broker-dealer side and a $175 million transfer from that house account to an MF Global account at JPMorgan in London.

She said that on Oct. 28, former MF Global Chief Executive Jon Corzine asked her to review a compliance certificate that JPMorgan Chase had requested concerning those wire transfers.

Ferber said the request covered all transfers made by MF Global - past, present and future.

"Although I had no reason to believe that any non-compliant transfers from segregated accounts had occurred or would occur, I did not think that any individual officer or employee should be asked to issue such a broad certificate unless that employee personally had handled all such transfers or was able to review all the transactions within the available timeframe. I also questioned the propriety of such an affirmative representation about future events," Ferber said.

Ferber said she then worked with JPMorgan lawyers to narrow the request. She said it was narrowed to her satisfaction on Oct. 29 and that she turned over the matter to an unnamed colleague in MF Global's legal department.

She did not recall further involvement in the issue.

Much of the debate about MF Global has been about whether Corzine knew of any misuse of customer funds.

On Friday, congressional investigators released details of emails from just before the firm's collapse that indicated Corzine gave direct instructions to cover the JPMorgan account overdraft.

Steven Goldberg, a spokesman for Corzine, said on Friday Corzine has testified before Congress that he asked that the JPMorgan overdraft be corrected, but never gave any instructions to misuse customer funds.