MF Global Holdings Ltd. collapsed last year because of mistakesmade by former chairman and chief executive officer Jon S. Corzine,according to a summary of findings from a probe led by U.S. HouseRepublicans.

Corzine expanded into new areas of business without ensuring itscore commodities trading business, according to the findingsreleased today by Representative Randy Neugebauer, the TexasRepublican and chairman of the U.S. House Financial Servicessubcommittee that pursued a yearlong investigation into thecollapse. Corzine, a former U.S. senator, governor of New Jerseyand Goldman Sachs Group Inc. co-chairman, has testified to Congressthat he doesn't know what happened to the money.

“Choices made by Jon Corzine during his tenure as chairman andCEO sealed MF Global's fate,” Neugebauer said in an e-mailstatement. “By expanding MF Global into new business lines withoutfirst returning its core commodities business to profitability,Corzine ensured that the company would face enormous resourcedemands and exposed it to new risks that it was ill-equipped tohandle,” the report states.

The summary reflects conclusions reached by Republicans, whohold a majority on the panel and were in contact with Democratsduring the investigation, according to Jeff Emerson, spokesman forthe Financial Services Committee. The investigation included threecongressional hearings, more than 50 interviews and a review ofdocuments from MF Global, former brokerage employees andregulators, according to the summary.

Returning Money

MF Global, which filed the eighth-largest U.S. bankruptcy onOct. 31, 2011, is returning money to customers who faced a $1.6billion shortfall as part of the firm's liquidation.

The CFTC, Securities and Exchange Commission and JusticeDepartment have been investigating the collapse of MF Global. Thecongressional investigation had trouble determining who wasresponsible for the gap in client funds, Neugebauer said in aninterview last month.

“Those people may be talking to the regulators or lawenforcement officials, but they aren't talking to us and so itmakes it difficult for us to make that call,” Neugebauer said in anOct. 31 interview in Chicago.

Louis Freeh, a trustee for parent company MF Global HoldingsLtd. has been unwinding the parent company under Chapter 11 of theU.S. Bankruptcy Code in an effort to repay creditors. JamesGiddens, a separate trustee for the failed brokerage, MF GlobalInc., is liquidating assets to repay customers under the SecuritiesInvestor Protection Act. Each trustee has conducted his own probeinto how the company failed and they have been at odds over whethercertain sums belong to creditors or customers.

Steven Goldberg, a New York-based spokesman for Corzine,declined immediate comment.

The brokerage case is Securities Investor Protection Corp. v. MFGlobal Inc., 11-02790, U.S. District Court, Southern District ofNew York (Manhattan). The parent's bankruptcy case is MF GlobalHoldings Ltd., 11-bk-15059, U.S. Bankruptcy Court, SouthernDistrict of New York (Manhattan).

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