Mr. Corzine, former CEO of the investment firm MF Global, said he doesn't know "where the money is" that went missing from customer accounts. Regulators and attorneys said they're still trying to learn what happened to it. Members of Congress, for their part, struggled to understand complexities surrounding how MF Global was regulated, how it failed on Oct. 31, and how some $1.2 billion went missing from the firm's customer accounts in the process.
But beyond all the unknowns, the hearing convened by a House panel appeared to give a clear signal on one important point: Major levels of risk remain in the financial industry despite the chastening impact of the financial crisis of 2008.
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And the firm's collapse came in a manner that echoed some of the problems seen in 2008 at companies like Bear Stearns and Lehman Brothers: unexpected losses followed by a loss of confidence among investors on whom the company relied.
When investors began withdrawing money, bankruptcy became unavoidable.
"Despite our best efforts to sell assets and generate liquidity, the marketplace lost confidence in the firm," Corzine said in his prepared testimony.
"I sincerely apologize," he said, "to our customers, our employees and our investors, who are bearing the brunt of the impact of the firm’s bankruptcy."
Since the financial crisis, federal agencies have sought to enhance oversight of financial firms, Congress has passed a sweeping regulatory reform act, and many banks have worked to strengthen their base of capital.
Yet economists say many issues linked to the financial crisis still simmer. The Thursday hearing, and the wider questions surrounding MF Global, symbolize some of those issues:
A culture of risk. Corzine sought to downplay the role that MF Global's big bets on euro-zone sovereign debt played in the firm's bankruptcy. He emphasized that the lion's share of the firm's $191.6 million loss, reported for the quarter that ended Sept. 30, came from a change in the value of tax losses from previous years. At the same time, outsiders have characterized the firm's strategy on sovereign debt as an aggressive one.
Leverage. Risk depends not only on how volatile a firm's investments are, but also on how big they are in relation to the capital base. Corzine said that during his two-year tenure he brought the leverage ratio down from 37-to-1 to 30-to-1. But that level is still high, and Corzine said he had hoped to reduce it further.
Incentives. Corzine said "much of my compensation was in the form of options to purchase stock, which would have value only if the company prospered." Some critics of the financial industry say that pay remains too dependent on the "up" side (how well a firm does in ordinary or good times) and is not conditional enough on guarding against risk of failure.
Human fallibility. MF Global failed despite being led by the former head of the nation's leading investment bank, a former top-tier politician, and a man who has been named as a potential Treasury Secretary if Timothy Geithner were to step down. The company had financial troubles before Corzine came in. He was attempting to remake the firm, specializing in brokering agriculture-related "derivatives," into a full-fledged investment bank.
Ties of Wall Street to Washington. Part of the hearing focused on ties between Corzine and Gary Gensler, who heads the Commodity Futures Trading Commission (CFTC). Both are veterans of Goldman Sachs, and Mr. Gensler recused himself from testifying regarding MF Global, following a request from Sen. Charles Grassley (R) of Iowa. Their connection adds to a long list of links between Wall Street (and Goldman in particular) and Washington.
Two recent Treasury secretaries have been former leaders of Goldman Sachs, and the current head of the Federal Reserve Bank of New York also hails from the investment bank.
Corzine, like other financial CEOs, sought to influence the tenor of new regulations coming from Washington. But at the hearing he said he had "no private conversations" with Gensler in the days just prior to the bankruptcy filing.
The CFTC is one of several regulatory bodies investigating MF Global's failure. CFTC Commissioner Jill Sommers said in testimony at the hearing that she expects the bankruptcy court on Friday to approve a funds transfer that would bring the firm's commodity customers "to at least two-thirds of their account values" on MF Global's books.
The other one-third of the money is the unsolved mystery that remains.
A good many of the account holders are farmers or ranchers, a point brought up repeatedly by lawmakers at the Agriculture Committee hearing, citing constituents who now face financial uncertainty.
Corzine said he was "hopeful that there will be effective recovery" of the funds, wherever they may be. Some others speaking at the hearing were less optimistic.
Although the firm is not considered "too big to fail," some outside observers say it offers a case study that supports recent regulatory reforms. One example in the Dodd-Frank legislation is called the Volcker Rule, designed to limit the exposure of large banks to high-risk trading activities.
"The collapse of MF Global shows why the so-called Volcker Rule contained in the new law is so necessary and why banks are intent on gutting it," a recent editorial in USA Today argued.