I bet Christine Serwinski didn’t picture herself testifying before a Congressional committee on March 28, 2012 back when she tendered her resignation as CFO of MF Global Inc. North America on June 27, 2011.
But there she was, at times seemingly close to tears and being peppered with tough questions as well as some nasty observations and declarations from Congressmen who while perhaps justifiably outraged also showed a remarkable lack of knowledge and detail. At one point during the hearing a Congressman told Serwinski and others testifying that they “should all be ashamed of themselves.”
Perhaps she was thinking to herself that she should have stayed on the beach—or wherever she was vacationing the week of Oct. 24-28.
The fact that, according to her written testimony, Serwinski tendered her resignation in June and her hand-picked replacement was due to begin on Nov. 1 is an indication that something was amiss at MF Global and that she may have already left in spirit. We have heard plenty of anecdotal evidence that there was a growing storm at the firm and the fact that Serwinski was on her way out may have been symptomatic of how many executives felt and perhaps why answers have been hard to come by. Perhaps they were all tightening up their resumes and letting junior staff members operate the doomed firm.
This goes back to the leadership of the firm. MF Global Inc. was the eighth largest futures commission merchant at the time and Jon Corzine appeared to treat it simply as a cash cow that would allow his grandiose plan of building a global investment bank. The fact that he was personally responsible for the ill-fated over-leveraged foreign debt positions that bankrupted the firm is remarkable. The core business of MF Global was its FCM yet Corzine from the beginning didn’t seem to understand or care to understand that business. Surely it is his business and political connections that allowed MF Global to gain dealer status at the New York Fed and was the driver behind the plan to create a major investment banking player.
Was there anyone there to say, perhaps we should focus on our core business? If there was, senior executives soon found out what happened to folks who questioned Corzine’s plan for the firm as Chief Risk Officer Michael Roseman was shown the door in January 2011 after numerous run ins with Corzine regarding the size of the position he was accumulating.
It is not surprising that back in December when Corzine, MF Global CFO Henri Steenkamp and COO Bradley Abelow testified before Congress they offered absolutely nothing of value to the proceedings. The Futures broker was just a means to an end for these men.