Roseman says he warned MF Global
The former chief risk officer at MF Global who raised red flags about the firm’s aggressive lawmakers trading his warnings bets told contributed to the firm’s decision Michael to Roseman, let him go in who 2011. was ousted in January 2011 from the now-bankrupt futures brokerage, said he rang alarm bells about the firm’s exposure to European sovereign debt a year before the firm collapsed in late October.
“My views on risk certainly played a factor in that decision,” Roseman told a House subcommittee, about why he was asked to leave the firm.
Before MF Global’s collapse, then chief executive Jon Corzine pushed the firm to take on a more aggressive trading strategy, including a $6.3-billion bet on European
debt, executed through repoto-maturity transactions.
Corzine, once CEO at Goldman Sachs and a former New Jersey governor and U.S. senator, also was pushing the futures brokerage to evolve into something closer to an investment bank.
Roseman said such a strategy required a lot of capital and a lot of liquidity, two things that ran out at the firm.
“I do think the strategy maybe exceeded the ability of the resources,” he said.
MF Global filed for bankruptcy after investors and customers began to flee, alarmed by the firm’s massive bet on European sovereign debt.
Investigators are still trying to find more than $600 million in missing customer money.