WASHINGTON, DC – U.S. Senator Pat Roberts (R-Kan.), ranking member of the Senate Committee on Agriculture, Nutrition and Forestry today made the following remarks at a hearing of the Agriculture Committee entitled, “Continued Review of MF Global: Accountability in the Futures Markets.”
“Today’s topics are serious matters,” Roberts said. “I know there are folks out there that believe the CFTC is moving too slowly – they’re asking why aren’t certain people in federal court already? I understand those frustrations. Hopefully today we’ll learn as much as possible about what took place during the final chaotic days at MF Global.”
“I also look forward to hearing the recommendations put forward in today’s second panel to see if we can work with the futures industry to prevent anything like this from happening again.
Our futures markets are an absolutely critical part of what allows this nation to provide its citizens with the least expensive and most reliable food supply in the world. For decades, our regulatory model has assured us that our futures markets have functioned properly. But, in light of recent events, it can and should be improved.”
Key witnesses testifying before the Committee include: Chairman of Commodity Futures Trading Commission, Gary Gensler, Jill Sommers, Commissioner, Commodity Futures Trading Commission, James Giddens, Trustee for the Securities Investment Protection Act Liquidation of MF Global, Inc., Ira Bodenstein, Chapter 7 Trustee for Peregrine Financial Group, Inc., Walter Lukken, President and Chief Executive Officer, Futures Industry Association, Terrence Duffy, President and Executive Chairman, CME Group, Dan Roth, President and Chief Executive Officer, National Futures Association, Diana Klemme, Vice President and Director-Grain Division, Grain Service Corporation, on behalf of the National Grain and Feed Association, and John Roe, Co-Founder, Commodity Customer Coalition. The Committee received written testimony from Judge Louis Freeh, Bankruptcy Trustee.
The following is text of Senator Roberts’ prepared remarks:
“Madam Chairwoman, thank you for scheduling this hearing on important issues regarding our oversight responsibilities for the Commodity Futures Trading Commission (CFTC).
“While today’s hearing is certainly of concern to our constituents, we must also work with you and the rest of our colleagues to consider how we can help farmers and ranchers who are suffering from the most serious drought in memory.
“But we cannot ignore our responsibilities to oversee an equally important part of the American economy—the commodity futures and derivatives industry.
“Today we have a two part hearing. First we’ll hear from the CFTC and the bankruptcy trustees who continue to investigate the details of the MF Global, and now Peregrine, collapse and bankruptcy.
“Second, we will hear from industry groups with regard to their recommendations to strengthen and secure the futures and derivatives industry.
“MF Global and Peregrine are no ordinary bankruptcies. Last fall, for the first time in history, the customers of a futures commission merchant’s segregated funds were absconded. Then, what was once unthinkable, actually happened again, with the news from Iowa regarding the Peregrine Financial Group.
“I would like to hear, in as much detail as possible, from the trustees of both of these bankruptcies about the efforts to return all of segregated account funds to the customers of these two firms.
“I appreciate the MF Global Inc. trustee, and the new Peregrine trustee being here today to update us on their efforts. The trustee for MF Global Holdings, Judge Louis Freeh, couldn’t be here today, though I thank him for his submitted testimony.
“I am also looking forward to hearing from key stakeholders in the futures industry in our second panel here today. You have put a tremendous amount of thought and effort into your recommendations to make the system stronger.
“This input is critically important to this committee as we consider the fundamental question of whether the self-regulatory structure that has existed for decades, is capable of regulating the industry, or whether it has outgrown its time and needs to be replaced by a massive transfer of authority—and money—to Washington and the CFTC. It should be noted that while Chairman Gensler does not advocate this approach, some do.
“I also thank Commissioner Sommers, who is leading the investigation of the MF Global failure, for being here this morning.
“Today’s topics are serious matters. I know there are folks out there that believe the CFTC is moving too slowly – they’re asking why aren’t certain people in federal court already? I understand those frustrations.
“I also know that investigations are ongoing and we must be sensitive of how much information is disclosed. We want to allow law enforcement to do their job so that we don’t jeopardize an arrest or conviction.
“Hopefully today we’ll learn as much as possible about what took place during the final chaotic days at MF Global.
“I also look forward to hearing the recommendations put forward in today’s second panel to see if we can work with the futures industry to prevent anything like this from happening again.
“Our futures markets are an absolutely critical part of what allows this nation to provide its citizens with the least expensive and most reliable food supply in the world.
“For decades, our regulatory model has assured us that our futures markets have functioned properly. But, in light of recent events, it can and should be improved.
“Madam Chairwoman, I look forward to hearing the recommendations being brought forward this morning regarding possible improvements.”
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