US senators attack MF Global watchdog for its poor policing

US SENATORS laid into the chairman of one of the key regulators of collapsed brokerage MF Global yesterday, attacking its apparently poor policing of the firm’s risky behaviour and accounting.

Gary Gensler, chairman of the Commodity Futures Trading Commission, was one of the first regulators called to testify before the Senate Agriculture Committee about MF Global’s bankruptcy on 31 October.

Republican lawmakers blasted Gensler’s decision to step back from the CFTC’s investigation of MF Global. Gensler recused himself in early November, leaving Jill Sommers, a Republican commissioner, to oversee the probe and answer questions.

“It looks to me like you’re trying to avoid the heat,” said senator Mike Johanns. “You certainly didn’t recuse yourself all of the other weeks and months and days while MF Global was doing what it was doing.”

The hearings aim to will assess whether regulators could have done more to prevent the failure. The committee is considering subpoenaing Jon Corzine, MF Global’s former chief.