The congressional investigation of the MF Global collapse and subsequent bankruptcy — the eighth-largest in U.S. history — is expected to focus on less senior members of the brokerage’s back-room team.

There is rampant speculation that at least one witness, former MF Global assistant treasurer Edith O’Brien, will plead the fifth at a hearing of a House Financial Services Subcommittee. Despite her pleas to those who might grant it, O’Brien has been denied immunity for her testimony, which will be given under subpoena.

Meanwhile, Jon Corzine, disgraced former head of MF Global (and former New Jersey governor and senator), denied reports he ordered some $200 million worth of funds — possibly including farmer/rancher client money — be transferred to remedy an overdraft in a brokerage account with bank JP Morgan. The directive was supposedly given last Oct. 28, three days prior to the firm’s implosion, and outlined in an O’Brien e-mail that says the $200 million transfer followed Corzine’s “direct instructions.”

(For more, see: Stabenow says MF Global bonuses ‘outrageous’)

This claim flies in the face of Corzine’s testimony before House and Senate legislators last December. During several hearings, Corzine claimed he was unaware of the “misuse” of customer funds, a word he used repeatedly. “I didn’t authorize it, didn’t intend to have it happen,” he told the Senate Agriculture Committee.

Fallout from the loss of some $1.2 billion worth of customer funds due to MF Global actions is not limited to congressional inquiry. In bankruptcy proceedings, client and creditor trustees have butted heads as some 10 class-action court cases have taken shape.

On March 23, John Roe — principal at BTR Trading Group and co-founder of the Commodity Customer Coalition (CCC), which is working to ensure MF Global customers are made whole — spoke with Farm Press. Roe, son of Tennessee Rep. Phil Roe, explained what is happening in the bankruptcy, what ex-FBI head Louis Freeh is doing in the case, and what regulatory actions Congress should consider. Among his comments:

On MF Global customer advocates and bankruptcy proceedings...

“We have a lot of irons in the fire.

“We’ve been working hard with distressed debt trading companies to get a better bid for MF Global claimants — and we did. We aren’t recommending anyone take that since we think there will be higher recoveries. But this will allow people who need to access their collateral now an avenue to do so.

“We’re also trying to get some traction to convert support of involuntary conversion for the holding company from Chapter 11 to Chapter 7. Basically, that company won’t survive, it isn’t reorganizing. By going to Chapter 7 it will clear out a bunch of professionals who are billing $1,000 an hour to the bankrupt state of the holding company.

“It more than chaps me a little that the two largest banks in the United States — Bank of America and JP Morgan — are paying for their legal expenses related to this out of the creditors’ committee from the holding company.

“Customers like us don’t get anyone to pay for our legal expenses.

“So, beyond it being the right thing to do, (the move) will help preserve capital for us to get when we prove comingling (of MF Global client funds). And that is coming — the money is missing and was clearly comingled and sent everywhere. We think some of it is sitting at the holding company.

“We want to make sure that when that comes out in court and we go to the holding company, (those funds) haven’t been billed out to every accounting firm and legal group now up there hitting the holding company.

“So, we met with CFTC (Commodity Futures Trading Commission) commissioners O’Malia and Sommers to discuss it. We’ll work with them to see if they can file it. If they don’t have the standing or are unwilling to file, maybe they’ll support us through an amicus brief.

We have a couple of court dates coming. April 2 is the closest.”