Jon Corzine, who lost $1.2 billion of customer money when his company, MF Global, went bankrupt, told the Senate today that he’s “not an accounting expert” and so cannot say definitively how financial regulations ought to be changed to prevent MF Global-style failures in the future.
“To the extent that people believe that the disclosures that we made were not adequate, and they believe that more disclosure is better, thatcertainly should be consider,” Corzine, asked if “we should reexamine the accounting treatment of repo-to-maturity transactions (RTMs),” replied. He added that, “I’m probably not the one who should speak to this — I’m certainly not an accounting expert — [because] the issues of off-balance sheet questions are very challenging for those who make rules in accounting.”
Here’s a Fitch Ratings description of how an RTM works:
Corzine says he does not know where $1.2 billion in customer money went when his firm went bankrupt.
