Washington, D.C. –U.S. Senator Amy Klobuchar today called on MF Global Bankruptcy Trustee Louis Freeh to deny any bonuses to MF Global executives and focus on recovering customers’ funds. According to a Wall Street Journal report, under the proposed bankruptcy trustee plan MF Global executives could get “performance-related” bonuses of hundreds of thousands of dollars even though Minnesota farmers’ and ranchers’ money remains missing. In a letter to Freeh, Klobuchar called the proposed bonuses “unacceptable” and urged him not to give payouts to the failed company’s executives.
“While Minnesota farmers and ranchers still have not been able to recover all of their missing funds, MF Global executives may be getting hundreds of thousands of dollars in bonuses – that is simply unacceptable,” Klobuchar said.“The trustee plan needs to get its priorities straight and focus on returning customers’ money rather than rewarding the failed company’s executives.”
A shortfall of up to $1.6 billion in customer funds has been discovered since MF Global declared bankruptcy on October 31, 2011. It is estimated that more than one hundred Minnesota farmers and businesses who have critical accounts with MF Global still have not been made whole since the firm filed for bankruptcy. Klobuchar’s office has been working directly with Minnesotans who lost money due to MF Global’s failure to help them recover their funds.
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 in December.
Klobuchar also 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 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.
The full text of the letter is included below.
March 9, 2011
Mr. Louis J. Freeh
Freeh Group International Solutions, LLC
1185 Avenue of the Americas, 30th Floor
New York, NY 10036
Dear Mr. Freeh:
On March 9, 2012, it was reported that you intend to seek bankruptcy court approval for a proposal to pay top executives and employees of MF Global Holdings Ltd. Performance-based bonuses of as much as several hundred thousand dollars. At a time when farmers, ranchers and other investors in my state have recovered only 72 cents on every dollar they held in segregated accounts with the firm, I find this action unacceptable.
These same executives were at the helm of MF Global when it collapsed resulting in a $1.6 billion shortfall in customer accounts. Issuing bonuses with the company’s holdings sends the wrong message to customers already skeptical of the bankruptcy process. Until a full accounting of the missing funds and the ongoing criminal and civil investigations are complete, I respectfully ask that you reconsider this proposal.
United States Senator