“Throughout this time, the firm and its employees were under the direction and control of MF Global management. Transfers of customer funds effectuated by MF Global for the benefit (of the firm) constitute very serious violations of our rules and of CFTC regulations.”

Duffy’s claims came after his earlier testimony before the House Agriculture Committee on Dec. 8 where he didn’t mention the allegation. “This leaves us wondering why you’re sharing it now,” said Michigan Sen. Debbie Stabenow, committee chairman, following Duffy’s opening statement.

Duffy said the information was “not made available to me prior” to the House hearing. “I received this information (on Dec. 10) from an e-mail and phone call from our lawyers. They informed me of what they’d found out in their investigation” but hadn’t shared previously.

Regarding ongoing MF Global bankruptcy proceedings, Duffy backed those calling for customers to be made whole first. Such clients “should be first in line in front of all other participants, including bondholders and everyone else.”

Duffy stuck another thumb in Corzine’s eye. In the wake of MF Global’s collapse, Duffy doesn’t believe the regulatory system “is broke. I think someone violated the rules.”

Kansas Sen. Pat Roberts rued the fact that Duffy hadn’t been in the panel prior to the MF Global executives. “You have sort of tossed a bomb.”

In the dark

Addressing Corzine (who was joined by the firm’s CFO Henri Steenkamp, and COO Bradley Abelow), North Dakota Sen. Kent Conrad said trying to “pierce the veil” surrounding MF Global was proving “incredibly” difficult. And it quickly became obvious that – despite hours’ worth of congressional testimony and weeks to consider their past actions – the firm’s lawyered-up and subpoenaed executives were simply unwilling to help the committee shed light on the situation.

Seeking a “direct answer,” Georgia Sen. Saxby Chambliss simply asked Corzine if he knew MF Global was using “customer funds to carry out proprietary transactions?”

Corzine claimed he was unaware of the “misuse” of customer funds, a word he used regularly. “I didn’t authorize it, didn’t intend to have it happen.”