A combative Roberts, ranking member of the committee, asked the panel a series of questions regarding MF Global actions in the days just prior to the discovery of “lost” customer funds. Did the firm receive margin calls “or other requests for liquidity on Oct. 28?”

Corzine: “I believe there were margin calls as there are on almost every day.”

Roberts: “Well, you indicated publically that $4.5 billion went out the door.”

Corzine: “I’ve repeatedly said that there was $4.5 billion worth of U.S. government agencies sold on that day. That was a sale designed to produce margin coming back to the firm as opposed to margin going out of the firm.”

Roberts: “We’ve heard a lot of 35¢ words being tossed around. ... We may not understand the ins and outs of it, but two things we do understand are margin calls and chain of command.

“We know customer money was accounted for on (Oct. 26). On (Oct. 28), the firm’s cash flow situation was dire and demands for cash kept coming in.”

Roberts asked Abelow and Corzine if it was the case “that MF Global didn’t have enough cash on hand to cover the cash needs that came in late (Oct. 28).”

Corzine: “From all reports that I’d received, to my recollection on that day, we were able to meet our cash demands.”

Abelow again claimed to be in the dark. “I do not recall being made aware of our running out of cash ... and being unable to meet obligations.”

Roberts dug farther, asking about the possibility that “operational money movers ... was told to cover the liquidity needs or margin calls overwhelming the firm’s cash flow by taking money out of the segregated customer accounts?”

Corzine: “I don’t believe anyone would operate that way. We had no experience in the 19 months I’d been there that anyone had overridden those systems. I have no reason to believe that occurred in those last hours.”

Abelow refused to “speculate about conversations I didn’t see or participate in. I can only tell you I don’t recall participating in any conversation about use of customer funds or assets other than for their intended purposes.”

Breaking the glass

Roberts, growing frustrated, made the point that before MF Global’s collapse, CME knew the firm was “attempting to hide something. In fact, didn’t MF Global leadership go so far as to request and receive an actual plan that would ‘break the glass’ and tap into your customers’ segregated accounts?”

Corzine admitted there was such a report, although “it was not ever the intent to recommend tapping into segregated customer funds.”

Despite his placement at the firm’s pinnacle, Abelow again claimed he was not plugged in and had not “reviewed the specific document. My recollection was that the key source of liquidity under that scenario was the use of a revolving credit facility.”

Roberts retorted: “you might want to take a look at it,” and then laid out a possible explanation for the firm’s actions. “By all accounts, on the Friday before bankruptcy, MF Global thought it had found a buyer to save (the firm). It seems well within the realm of possibility that a classic run on the bank overwhelmed (the firm’s) cash flow. And an executive could have communicated, somehow, an order to use your customer segregated funds to cover the firm’s liquidity, thinking, of course, everything would be fine by Monday morning. The company would be bought out and an infusion of money from the new owner could replace the missing customer funds. Is this plausible?”