Klobuchar joins bipartisan group requesting Justice Department investigate MF Global collapse

A press release from the office of U.S. Sen. Amy Klobuchar:

Washington, D.C. – Today U.S. Senator Amy Klobuchar and 16 other senators sent a letter to U.S. Attorney General Eric Holder requesting that the Department of Justice use all available tools to investigate MF Global executives who may have made illegal transactions using customer funds. The letter, also signed by Senators Max Baucus (D-MT), Chairman of the Senate Finance Committee, and John Thune (R-SD), Chairman of the Senate Republican Policy Committee, urges the Department to pursue criminal prosecution if the investigation uncovers illegal action.

The Senators wrote, “If the Department’s ongoing investigation uncovers illegal actions, criminal prosecution should be pursued without hesitation. In order to get to the bottom of this, we urge federal agents to use every legal resource available.”

Up to $1.2 billion in customer funds have disappeared since MF Global declared bankruptcy on October 31, 2011.

Klobuchar serves on the Senate Agriculture Committee, where she has pushed for answers on what happened to Minnesota farmers’ and ranchers’ funds. She invited Dean Tofteland, a Minnesota farmer affected by the MF Global failure, to testify at a hearing last week.

Earlier this month, Klobuchar successfully pressed finance watchdogs to pass a key rule reform to close loopholes in the financial system to help prevent Wall Street from gambling with customers’ money. During a recent Senate Agriculture Committee hearing, Klobuchar pressed Commodity Futures Trading Commission (CFTC) Commissioner Jill Sommers, who is leading the Commission’s MF Global investigation, for answers on how funds that were supposed to be kept safe in segregated accounts could now be in jeopardy and what the CFTC can do to help farmers and ranchers gain access to their funds as quickly as possible.

It is estimated that more than one hundred Minnesota farmers and businesses who have critical accounts with MF Global have been unable to access their funds since the firm filed for bankruptcy in October. Klobuchar’s office has been working directly with Minnesotans who lost money due to MF Global’s failure and pushing to recover the funds.

The full letter text is included below.

December 23, 2011

The Honorable Eric Holder
Attorney General
Department of Justice
950 Pennsylvania Ave. NW, Ste. 5111
Washington, DC 20530-0009

Dear Attorney General Holder:

We are writing to emphasize the importance of a comprehensive and exhaustive investigation into the actions of MF Global executives regarding the potentially illegal misappropriation of funds from the segregated accounts of its commodity customers. If the Department’s ongoing investigation uncovers illegal actions, criminal prosecution should be pursued without hesitation. In order to get to the bottom of this, we urge federal agents to use every legal resource available.

In the wake of the MF Global bankruptcy proceedings and the disclosure that hundreds of millions of client funds were completely unaccounted for, tens of thousands of farmers, grain elevators and others across the country have faced the real possibility that they would not be made whole on their accounts. This happened despite federal regulations that require collateral equal in value to the customer investments to remain in the customer segregated account at all times. If credible evidence of illegalities is found by the investigation, significant resources should be utilized to prosecute those responsible.

We understand that criminal cases involving complex financial transactions are sometimes difficult to prove beyond a reasonable doubt. However, tens of thousands of American farmers have seen their customer accounts raided by MF Global to the tune of hundreds of millions of dollars. The need for extraordinary effort should not discourage the Department of Justice from pursuing this case to the full extent of the law.

We believe that justice must be brought to this issue to send a message to Wall Street that the trust individual investors place in these firms must always be returned with lawful, conscientious, and honest management of client funds. Thank you for your consideration.

Sincerely,

Max Baucus (D-Mont.)
John Thune (R-S.D.)
Amy Klobuchar (D-Minn.)
John Barrasso (R-Wyo.)
Kent Conrad (D-N.D.)
Scott Brown (R-Mass.)
Sherrod Brown (D-Ohio)
Roy Blunt (R-Mo.)
Ben Nelson (D-Neb.)
Mark Kirk (R-Ill.)
Jon Tester (D-Mont.)
Chuck Grassley (R-Iowa)
Tim Johnson (D-S.D.)
Mike Johanns (R-Neb.)
Dan Coats (R-Ind.)
Johnny Isakson (R-Ga.)
John Hoeven (R-N.D.)