Earlier this week, the Senate unanimously voted to oppose bonuses to the former executives of recently bankrupt MF Global.
Before its collapse, MF Global was a major global financial derivatives broker, providing exchange-traded derivatives, such as futures and options. Many farmers invested money in the company, sinking significant amounts of free cash into their futures market. MF’s collapse was a shock to many investors and was the eighth largest business collapse in American history.
While the financial giant’s collapse shocked customers, more horrifying was the news that MF executives mixed personal accounts with business accounts and misappropriated about $1.6 billion of customer investments. Despite promises by bankruptcy managers, this money has not been recovered.
Added to this mix was news that Louis Freeh, MF’s bankruptcy trustee, is planning on submitting a plan to bankruptcy judges that would pay MF executives millions of dollars in bonuses.
Earlier this month, the members of the Senate Agriculture Committee sent a letter to Freeh urging him to reject these bonuses. Since their letter has not appeared to dissuade Freeh, the Senate recently upped the ante. The Senate resolution, introduced by Debbie Stabenow and passed unanimously, resolved “That it is the sense of the Senate that bonuses should not be paid to the executives and employees who were responsible for the day-to-day management and operations of MF Global until its customers’ segregated account funds are repaid in full and investigations by Federal authorities have revealed both the cause of, and parties responsible for, the loss of millions of dollars of customer money.”
While the authority of the Senate to block the bonuses may be limited, many Senators are hoping that increasing the criticism of MF and Freeh will focus public outrage and help increase pressure the Obama Administration and Freeh.
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Written by: Justin Ellison / Farm Plus Staff Writer