board were getting uncomfortable in the $2 billion range? >> i specifically started becoming more uncomfortable at $2 billion. i felt it was in excess of the approved board's approved risk appetite statement at that point in time. >> did you tell anybody that? >> yes, i presented the board. >> did you tell the credit rating agencies that? >> at that point in time, that was -- i don't think an issue to bring to the credit agencies until after discussions potentially with the board. >> well, they were rating you this entire time. they had you in a good watch, actually. they kept either affirming or downgrading you pretty much repeatedly from 2008. i mean i've never seen this many credit ratings of a firm by two different -- to major credit rating agencies so frequently. seems like every couple of months somebody was rating you. >> you have to remember keep it in context to mf global's history. as you know, in february of

2008, shortly after the ipo, the company suffered a weak trading incident. >> i understand that. but that's a separate item. i'll give you the benefit of the doubt that you addressed that issue. that's why you were hired. okay. that was a problem. but that was minor problem. you took care of it. i'm wondering going forward as you're getting credit rating agencies in your face every couple of months, were you telling them that you were uncomfortable at the levels they were at? >> first, sir, i didn't meet with the rating agencies regularly. i wasn't the -- >> so the credit rating agencies were rating you without talking to the risk manager? >> periodically i would. not every three months, every month. but i would say on a regular basis maybe once or twice a year. >> and whether you talk to them, did you tell them that you were uncomfortable? >> having said that, sir, they had up until that point in time, i firmly believe they had a strong transparency on the risk of the organization. >> you said we're over $2

billion, i'm starting to get a little nervous? >> no, i did not say that. >> all right. that's what i was trying to get at. mr. roseman -- i'm story, mr. stockmore. when you took office in january 2011, were you aware of your predecessors concerns of the $2 billion limit? >> mr. roseman and i did not spend a lot of time together in the overlap. and as a general mter, these were large position but i was not specifically aware of concerns at that point upon joining. >> so as he was leaving, he didn't tell you nor there was any documentation that you came upon that he said gee once they hit $2 billion my predecessor got nervous, maybe i should think about this? >> i explored upon arrival a couple of board meeting minutes

that covered that period from, the best of my recollection, november and december before i -- before i joined. and to try and find explore a little bit what my -- what had been undertaken just before i joined. and in those minutes was no specific indication of concern. but it certainly did highlight -- >> so you didn't find anything that basically said that a bell went off and when you came in there were $4.5 billion and that didn't get you nervous? you thought that was acceptable? >> what i'm saying this is differently. in the board memo minutes, there was an indication that risks were discussed and highlighted by mr. roseman. and with the board and that gave me some confidence that there was a full understanding. >> apologize. i'm way over my time. i appreciate the generosity of

the chairman. one last question and i'll just jump to it. at the end you say you have no personal knowledge of where the money is or what happened. do you think that maybe this excessive risk and the pressure that that might have caused the loss that's were seen in the excessive risks might have maybe encouraged some of the employees there to either bend or stretch or even possibly break rules? >> sir, i don't think so. and it would be very hard at this point in time, i hope at some point in time we really do understand the details of that situation. and in particular as it relateses to these sovereign risks. the analysis that when the last chapter does come through i think we'll be able to see with a bit more clarity what in fact -- >> mr. chairman, thank you very much for your indulgence. >> thank you. i have one quick follow up. want to go to this break the

glass report on october 13th. and it says this report was prepared by treasury finance and risk teams. that would be your team, is that right? >> correct. that's what i mentioned before, senior member from my team provided is a provided assistance on the scenarios. >> so this is a plan where these people think they're going to go under. this is break the glass deal. you're the chief risk officer and you're not a part of this plan? >> as i said, you know, i had a senior officer doing some of the risk analysis. and as it relates to the production of that particular document, i was not part of the specific risk team that contributed to that. and that treasury and finance area really drove the assessment. so yes, i am --ly n li have not

the final. >> but you're aware that a document is being prepared where they're getting in the bunker. and you agree with mr. corzine's statement on october 24th that everything is fine? having knowledge that senior management is working on a plan to go to the fox hole? >> yes, to the best of my knowledge, the break the glass scenario is really a contingency plan that would have been an intelligent thing to do under a number of different cases, in particular for a company that was just above investment grade. so i think that those, as i said, the break the glass scenario is something that was an intelligent contingency plan to be looking at. >> what prompted them to do that? it wasn't hey, it's october, why don't we put together a break the glass strategy. there had to be something that caused them to think that, wouldn't you think?

that they needed to develop a plan like that? >> best of my recollection, it was a board request. again, i think, to find out some detail as to what the request and how it was prepared would have to be really directed towards our finance and treasury group who really drove that. >> i appreciate the committee's indulgen indulgence. now i yield to the vice chairman of the company. >> you just indicated that the break the glass plan was a board request. was there anybody within the organization that had equal concerns -- the board concern. >> eye didn't hear the question. >> you indicated that this document was a board request. didn't that come from within the organization at all? >> to the best of my understanding, came from the board. >> directly from the board. >> uh-huh. >> you indicated you didn't spend much time in the transition with mr. roseman.

did you spend any time as to the obligations of chief risk officer? >> uh-huh. >> how much time did you spend with him? >> yes, michael and i spent an hour together two, three-four weeks into my initial -- when i first arrived. and michael's helpful in the transition as well with the series of -- including in a series of e-mails that i vaguely remember receiving but i couldn't speak to exactly. >> mr. roseman indicate his concern about the risk in excess of $2 billion of sovereign debt? >> as a general matter during that brief discussion that we had for an hour, to the best of my recollection, it was certainly indicated as an item of interest as it relates to the company. but i don't recall any specific discussions on -- >> i want to go back to the october 13 break the glass

scenario that you indicated in response to the chairman's question. you were not directly involved in this plan, is that correct? >> correct. >> you're the chief risk officer responsible for how many employees of the organization? >> in my -- on my team, approximately 60. >> 60. you're office is in the same building? >> uh-huh. >> liquidity was a key concern of this plan, correct? >> the first time i had an opportunity to really look at it carefully was just a day ago what provided to me. >> so our committee obtained internal notes from a management meeting and the notes contained a discussion of mf global's big european exposure. the analyst drafted the notes also writes that mf global is

scrambling for funding and hit lost its liquidity. i'd like to take you to october 24th. a day when this break the glass plan was being drafted and impleme implemented. they said that mf global is scrambling with funding. on the 24th, mf global cfo wrote a memo stating that he believed mf global's capital and liquidity has never been stronger. and that mf global is in its strongest position ever as a public entity. can you reconcile those two statement for our committee? >> i can't. i don't know what context our cfo sent that note out. so i couldn't, and to the best of my recollection, is not part of that dialogue. i really couldn't speak to that --

>> did you speak with mr. steincan around that time? >> not on this subject, no. >> given what you know about the liquidity challenge that's mf global was facing now on october 24th, in which break the glass plan had foreseen, how do you think that mr. steencan could make this representation to a credit rating agency? >> yeah, again, i'd be speculating as to what context mr. steencamp was referring to. and it will be hard for me to give you a comment as to why and what the context was for that particular note. >> were therein ter internal me between your risk people and finance people in creation of this document? >> there was. >> and were you involved in any of those meetings? >> very early on, as the treasury and finance team was

pulling the document together, and as i mentioned before, subsequent -- excuse me, after that point in time, the senior member of my staff assisted the -- in the creation of that document as it relates to some of the various stress scenarios. >> $1.2 billion of customer money is missing. i have constituents who have lost a significant amount of money. your risk team is putting together what is essentially an armageddon plan for the organization. and you want the committee to believe that you had no direct involvement in the creation of the plan, you never saw the plan until very recently? >> again, sir, i mentioned that the contingency plan such as that was certainly sensible.

and that is, you know, i'm just giving you the stated truth of my involvement in it. >> thank you, chairman. >> mr. miller, five minutes. >> thank you, mr. chairman. in response to your questions, you said i only spent an hour with mr. roseman and that the subject of the concerns about the sovereign debt positions did come up. but you also knew that you were being hired from the outside to replace a cro who was being asked to leave. did you have any conversations in your interviews about why mr. roseman was leaving and if it had to do with his risk appetite? >> in those conversations, we were -- it was congenial meeting. we talked a little bit -- it was a congenial meeting. we talked about the concept of

my being hired was really related to the company's stated goals of transitioning from a broker, future commissions broker to a broker/dealer and that my skill set was more -- had more history and more aligned with what the firm is trying to do. so it was really more about that as it relates to their hiring. >> and that's the reason this gave that you mr. roseman was being asked to leave. did they discuss his risk appetite? did they have discussion with you about risk appetite for the firm? what they wanted to happen at the firm? >> as a general matter, yes, we talked about -- if you're referring to the point of when i got to the firm, we certainly talked about stated goals going forward and the types of

analysis and assessment that would have to be performed in order to accommodate that. >> all right. according to published reports, mr. roseman had direct access to the ceo and to the board. and whethn you came in, your access was no longer to the ceo or the board but to the coo. did you have a discussion about that change in organization? >> uh-huh. it made -- >> did you have any questions about whether concerns that you might have about risk would make it to the board? >> sir, my -- i reported directly to the coo. and i had responsibilities to report from time to time on risk matters to the best of my understanding. >> did you ask why you were no longer talking to the board? >> let me make sure i correct you on this. while i reported directly to the coo, i also had obligations to

the board to report on risks and highlight risks similar to -- similar to my predecessor. >> published reports are that your role basically consisted of helping prepare power point presentations for jon corzine to make to the board. is that incorrect? >> that's incorrect. >> okay. a statement was read that mr. corzine made to investors shortly before the collapse that it presented no threat to capital of any consequence a week before the collapse, the cfo told standard & poors, s & p, that global -- mf global is in the strongest position ever and actually while moodies had

downgraded mf global to junk status four days earlier at the to time of the collapse, s & p had mf global at investment level. were you talked to? >> no. did you know the representations were being made? >> the -- mr. corzine's comments, i believe, were public if i understood the quote that you were referring to. and the representation, as i mentioned, before from mr. steamcamp, i was not involved or couldn't represent him on what the context was that he was -- >> did you pass along to anybody that you disagreed with the representations, that you thought there was, in fact, risk? who did you tell? >> sir, as i mention ed, as far as the risk highlights and risk

reporting goes, you know, for example, at the august board meeting, there was a quite a detailed representation of both verbal and a power point presented. is that example you're referring to? >> okay. you had an auditor. price warehouse coopers. did they raise any concerns about the previous reporting relationship between mr. roseman and the ceo and the board and the change that you reported to the coo? did they raise any concerns with the processes that mf global had in place for pro pry takery traiting? was wise water house coopers, did they know about the ending of the direct reporting to the board by the cro? >> i was not involved in the --

any direct relationships or discussions with price waterhouse. >> are you aware of any? did anyone -- did anyone tell you they talked to price waterhouse coopers or that they raised any concern or they said it's okay with us? >> not to my understanding. >> you know of no discussion at all of price -- any conversation, any communication with price waterhouse coopers, pwc, about the changes in the organization of mf global, the changes in reporting relationship between the cro and the board or any changes or any -- anything regarding the processes for pro pry takery trading and account segregation? >> to the best of my recollection, i was not involved in those discussions.

>> did you have a conversation at the water cooler? did you hear anything? was there a rumor? >> again, i wasn't responsible for the price waterhouse cooper's relationship or -- >> i know that. did you hear about it. were there any discussions within the organization? did you hear from anybody whether price waterhouse cooper was okay with all of this? >> again, i come back to my original comment. i was, to the best of my recollection, i was not aware of specific conversations regarding t the items you just mentioned. >> my time expired. >> let's go to mr. posey. he is recognized for five minutes.

>> thank you very much, mr. chairman. it appears in trying to put the pieces of the puzzle together that mr. roseman was a chief financial officer until he stopped telling mr. corzine what he wanted to hear. and then mr. stockman was hired to tell mr. corzine what he wanted to hear. just saying. that's clearly how ate pears so far. i red an article sold out. private meeting between government regulators. i'd like to begin by asking mr. stockman just a few questions about that meeting. do you know about the meeting with the sec, jp morgan, goldman sachs and others? >> no, sir, i wasn't involved with those meetings if i understand which ones they were. >> do you know about the meeting? >> i was aware but not involved with those meetings. >> do you know the names of

those who were there? >> i do not. >> how did you find out about the meeting? >> if it's the sec meetings that you -- that you are referring to, some of this was in the public and as a general matter, you know -- >> rumor mill? >> i couldn't -- i don't recall exactly where. do you know the names of anyone that was there under oath? >> under oath, to the best of my knowledge, let me make sure i'm sure of the meetings you were referring, to i was not at the meetings. >> clearly, the october 31st

meeting which you mentioned was with the sec. do you know the names of anyone that was at that meeting? rumored? firsthand? second hand? fifth hand? i want to know if you know about anyone at that meeting. >> i do not. >> did you find out after that meeting what transactions were made by mf global holdings? >> no, sir. >> you don't know what decisions came out of that meeting, what they decided to do with assets, how they decided to host the investors? you didn't hear of any of that anywhere? >> sir, if you're referring to the final days of the company wind down, is that what you're referring to? >> you're the risk manager.

i'm just a congressman trying to put pieces together. you know more about this in your little finger than everybody up in this board has and we're trying to get you to tell us a little bit about it so we may better protect the public and maybe for first time in four years have some accountability for the thieves that are plundering the public. and it's important for you to be honest with us and tell us everything you know about this situation in order to do that. you're testimony, what you knew about it, did you want say this is all i know about it. you said this is all i care to say about it. this meeting is very, very critical what went on at this meeting. and i want to know everything that you know about that meeting and i'm not going to stop asking questions about it on record, under oath until the chairman makes me. unless you start answering some of them. >> i wouldn't be able to answer to the question in any different way because i was not there or involved at that meeting.

>> well the last question i asked you was the result of what came out of the meeting. certainly you knew what transpired after the meeting, don't you? there was a decision about selling some assets, who was going to get priority of the assets. tell me what you know about that subsequent to the meeting, please. >> in subsequent to the meeting, i was not involved in the winddown of the company or in its decision to file for bankruptcy. so i was not in the areas, so to speak, when actual specific decisions were being made regarding which assets to sell and in the winddown. >> so you're saying you don't even know what decisions were made? >> i'm saying that i was not involved in the wind down of the company during that period of time when assets and decisions were being made to reduce exposure. >> who do you think is the best

person to know what went on in that meeting? >> again -- under oath, i know. i'm really just saying that not having been a participant or invited to the meeting that you're referring to, i think it wouldn't be hard to figure out who the attendees were. but as you asked before -- >> 400 million people in the united states of america, it could have been any of them. is that what you're telling me? >> no, sir. i'm just saying simply saying that not having either been invited to that meeting or participant at that meeting, i wouldn't know -- >> and you have no clue who would have been there? >> well, fairly -- it would make sense that some senior management would have been

there. >> and some names maybe? >> i mean our senior management is, again, hard for me to be very specific because, you know this particular meeting neither was i invited or a participant. so it's just -- >> listen. listen. you were not a lowly clerk in that organization. you know darn good and well what's going on within that organization. you know darn good and well can you tell me who you think should have been at that meeting. and i'm just asking you to be honest with us and do it. >> again, to the -- i just have to keep coming back to i could only imagine -- >> mr. roseman, can you give me any ideas? obviously you needed to be replaced by this guy. but maybe you have a little bit better knowledge how that

organization works. >> i think clearly i wasn't there, but in mr. stockman's defense, it sounds like he wasn't at the meeting. but after the fact i'm sure there were some direction that was given to individuals. want the wasn't there. i can't respond whether he knows what action he would have been given. >> who do you think would have been in attendance? >> certainly, if it were a very concerning meeting like you're suggesting, i would expect mr. corzine to be there. i would have expected mr. avalo to be there and maybe a few other members of the executive management. but at least these two individuals. >> okay. >> thank you, mr. chairman. >> we're going to have to -- >> that is speculation, of course. >> move on. miss waters? >> thank you very much, mr. chairman. i -- it's clear to me what was

taking place at mf capital. and i think that this information has come out in a previous hearing or previous hearings. mr. corzine basically was a one-man show. he was the chairman and ceo and he threatened the board when they got in the way of his sovereign trading. he was glad when mr. roseman left. he hired his own people. he did his thing. and so i think there's no question that mr. corzine