roseman out and replaced mr. roseman with the "yes" man. does it look that way to you? mr. roseman, would you comment at all? you gave them information that they didn't like so they replaced you with someone that would give them information that they liked? >> can i -- i've answered that question actually twice. i mean, in fairness, i have to say i'm really not in the position to answer that. others made the decision for me. some of my views would have played a part, i would believe. >> mr. stockman? >> and, sir, i think, as in my testimony notes, that when i joined the firm doing deep analysis on sovereign positions in particular, i found the risks acceptable and, in particular, so did the board and senior management in terms of finding those risks acceptable. and as market conditions changed, the -- i expressed my views as it relates to wanting to bring hedging strategies and bring the risk down. so i would have to take exception to your characterization of a "yes" man. >> so, in your opinion, did the margins -- the money was there to cover the margins on whatever the rec

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.

roseman. i am sorry. mr. stockman. when you took office in january of 2011 were you aware of the concerns of the $2 billion limit? >> mr. roseman and i did not spend a lot of time together in overlap. as a general matter we were in large positions but i was not specifically aware of concerns at that point on joining. >> as he was leaving did he tell you there was any documentation you came across in that period of time that indicated my predecessor got nervous and i should think about this? >> high explore upon arrival lake couple of board meeting minutes that covered that period to the best of my recollection november and december before i joined to try and find -- explore a little bit what had been undertaken just before i joined. in those minutes was no specific indication of concern but highlighted -- >> you didn't find anything that said a bell went off -- you thought that was acceptable? >> it was a little different. in the board memo minutes there was an indication that the risks were d

roseman, about whether you raised the flag. and if you could explain for me what you think caused the problem here. you started to outline it in the answer that you just finished with him. if can you walk me through that in a simple way as you can and tell me how you thought the risk management process here fell apart or didn't work right and how it maybe should have happened. >> well, the first thing that i think the committee needs to realize is as mr. stockman stated as well, i mean, the sovereign risks -- the sovereign positions and the associated risks with those positions were very well communicated, very transparent within the organizati organization and mr. corzine and to the board. >> so the risk associated with everything that was going on were clearly laid out to mr. corzine, the board, and they decided to go forward notwithstanding some of those -- understanding what the risks were? >> in fairness to them, as in other events, or events that haven't occurred before, sometimes there's a difference of opinion on the vi

roseman. >> chairman, ranking member, and members of the subcommittee, my name is michael roseman, former risk officer of mf global group from january 2008 to january 2011. thank you for the opportunity to testify today. i hope that my comments will help you continue to build on your knowledge of the events that led to the collapse of mf global. >> mr. roseman, i would ask you to pull your microphone a little closer to you there. >> that good? regarding my background aerospace engineering graduating from the university of north carolina -- university of delaware as aerospace engineer. 1984 received an mba from north carolina and pursued a career in financial services. i first joined a company for risk analysis. moved and co-managed us dollar tc option portfolio. for a number of years before returning to risk management as global head of market risk. in 2001 i joined a bank in montreal as head of u.s. risk oversight onfor all trading, underwriting and investment activities in the united states

roseman, you have a very impressive resume. and a wide variety of experiences in the financial industry. do you believe that your background was not fully at tuned to the broker dealer side of mf global's business in. >> i would fully disagree with that statement. i certainly had the experience in investment banking prior to mf global. >> okay. so it is true that you have a very strong financial background and experience and a good strong resume? you would agree with me there, right? >> yeah, i appreciate you saying it that way but i would say i certainly had a strong background. >> thank you. >> with more on today's hearing we're joined by correspondent sarah lynch from reuters and in the rayburn house office building. thanks for being with us. >> no problem. >> what did you learn today about mf global and what came out of today's session? >> today's hearing was really an opportunity for lawmakers to expand beyond what the focus has been up till now. they've mostly been holding hearings trying to determine what has happened to

roseman says his warnings helped cost him his job. michael stockman replaced roseman as chief risk officer, but said he was not hired to be a yes man. stockman insists he grew concerned last summer about the risk m.f. global was taking on. >> i found that the risks and rewards were acceptable, and then in july, i had a change of view. >> reporter: the ratings firms were next to feel the heat of congressional outrage. lawmakers demanded to know why moody's and standard and poor's waited so long to downgrade m.f. global. >> i don't know which one of you i should be more upset with-- the one who says, "it took me six months to get upset," or the one who said, "i didn't catch it in the first place, and as soon as i figured out i blew it in the first place, i got upset within a couple of days." both those answers stink. >> reporter: standard and poor's said m.f. global's chief financial officer sent an email a week before the firm failed, saying it had never been stronger. richard cantor, moody's chief credit officer, said his firm always

roseman. did you spend any time as he passed on the obligations of the chief chris officer? how much time did you spend? >> michael and i spent an hour together, too, three, four weeks into my initial when i first arrived and michael was helpful in the transition as well with the series of including the the e-mails that i remember receiving but i couldn't speak to exactly -- >> did he indicate his concern about the rest in excess of $2 billion of sovereign debt? >> as a general matter during that brief discussion that we have for an hour to the best of my recollection, it was certainly an indicator as an item of the interests as it relates to the company. but i don't recall any specific discussions. >> i want to go back to the october 13th break the glass scenario that you indicated in response to the german's question that you were not directly involved in this plan. is that correct? >> correct. you are the chief risk officer responsible for how many employees in the organization? >> in my te

roseman out and replaced mr. roseman with the yes-man. does it look that way to you guys? mr. roseman, would you comment at all you gave them information they didn't like and replaced you and put someone in that gave them information that they liked? >> i would say some of my views would have played a part, i believe. >> stockman disputed being a yes-man but then faced the question of whether once those trades were made keeping the risk off the balance sheet was actually ethical. >> as it relates to accounting and accounting treatment and how the -- >> you don't have to keep going. i get the drift. $1.2 billion worth of people got the drift. we're hiding around the corners. we're doing stuff that we don't know is legal. we certainly will not say it's ethical or unethical. and we're deeply sorry. >> one thing they both agreed on is that they warned the board and ceo jon corzine. >> oh, really? >> at different times, the former risk chief said he warned him at the end of 2010 before he was replaced. and the newer risk chief, michael stockman, said he warned him in july of 2011.

roseman, do you think that it could jeopardize the integrity of the markets? people could lose faith in our system? >> i would hope not. i mean, hopefully this will get reconciled and they don't lose faith. >> even if they get reconciled, the point is, people were in segregated accounts, they were told that it was safe and the money is missing. even if it gets returned later, i think it's safe to say that people lose faith. thank you very much. >> thank you, gentlemen. i thank our witnesses for your time. and with that, this panel is excused and we will call up panel number two. >>> and we are waiting to take you live to las vegas where donald trump plans to make a political announcement. earlier he confirmed media reports that he's endorsing mitt romney for the republican presidential nomination. this morning, several news organizations reported that mr. trump was going to endorse newt gingrich. mr. trump met with both of these republican presidential candidates last year at his trump tower offices in new york city. nevada republicans hold their caucuses this

roseman here today who were risk officers inside the organization. again, the bottom line here is trying to figure out what happened. what we will sense, and what we've seen in our problems we've had in the marketplace, there are those who said if we'd have had dodd/frank in place or this regulation in place or had this, one of the things that happens is people just to conclusions and try to overreact to that. what we want to do is get to the bottom of what happens here and make a finding. one of the things i think we've seen when we look back in the 2008 crisis, a lot of people said it was the fact we had lack of regulation. truth of the matter is had we taken time to ascertain exactly what happened, we would have found 2008 happened not because we didn't have enough regulations but in many cases regulators not doing their jobs, market behavior that was not acceptable. so the purpose of this hearing and the hearings we've had in the past, again, get to the bottom of that. i look forward to hearing from our witnesses today. with that i would yield to

roseman. >> my name is michael roseman, former chief financial officer for mf global group.or the opportunity to testify today. i hope that my comments will be to continue to build on your knowledge of the events atmf global. >> i will ask you to pull your microphone a little closer to you. >> is that good? thank you. regarding my background, i started my professional career as an aerospace and engineered after graduating from the university of delaware. as an aerospace engineer. in 1994, i received an m.b.a. from the university of north carolina and pursued a career in financial-services. i first joined financial products with the responsibility of the risk analysis function. the following year, i'm co- manage the u.s. dollar otc portfolio. for a number of years, before returning to risk management. in 2001, i joined the bank of montreal as the head of u.s. risk oversight from trading, underwriting, and investment activities in the united states and with the mandate to strengthen the risk-management activities and capabilities in the u.s. in 2004, i joined new edge as the c

michael roseman and several other former and current mf global employees and ratings agency executives house oversight committee. former ceo jon corzine will not make an appearance today. >>> amr, the parent of american airlines, is seeking to cut 13,000 jobs or 15% of the workforce as it works through bankruptcy. the company wants to cut $2 billion in annual costs. measures include terminating its pension plans which would amount to the largest pension default in u.s. history. amr which failed for chapter 11 in november has lost $12.5 billion since 2001. >>> sony has reported a massive third quarter earnings miss today after the bell. the company wants the darling of the consumer electronics world to post more than $2 billion operating loss compared to the near $1 billion net profit recorded last year. sony's blamed the strong yen. chronic losses from its tv unit and tough competition from samsung electronics. howard stringer the ceo is going to be stepping down in april. sony will hope to turn things around with the employment of its incoming chief kazuo hirai. >>> also, deutsche ban

in his prepared statement this morning roseman testified and i quote, late october 2011 shortly beforel global collapse i recall mf global's european sovereign debt positions with were approaching 3.4 to 5 billion dollars. at think point he testified not only concerned about the capital risk but given the size i was concerned with the liquidity risks. he had added i discussedkers about the positions however the risk scenarios i presented were challenged as being implausible. under the investment microscope the rates agency moody's. it was their decision to downgrade mf global to junk bond status a week before the firm filed for bankruptcy that set in motion investigators described as a classic run on the bank and sealed the firm's fate. however lawmakers will press a top moody's officer why the firm took so long to detect the internal problems at mf global. jon. jon: whistle-blowers are never valued. james rosen. thanks. jenna: a big debate in congress right now is happening over funding for the 9/11 museum why in new york city. legislation before the senate is calling for $20 million

roseman. >> chairman neugebauer, ranking member capuano, number said the subcommittee.men with michael grossman, chief risk officer of global group from august 2008, january 2011. thank you for the opportunity to testify today. i hope my comments will continue to grow on your knowledge of the events that led to the collapse of mf global. >> and ask you to pull your microphone a little closer to you? >> regarding my background and career as an aerospace engineer i'm graduating from the university of north carolina and university of delaware. as an aerospace engineer, since 1994 i received an mba at the university of north carolina and received a career in financial services. i first joined the responsibilities for the risk analysis function are the following year he moved and comanage the u.s. dollar otc portfolios. for a number of years as global head of market risk. in 2001, he joined the point of montrÉal and risk oversight of underwriting and investment that in the united states and with the mandated strength and risk management at today's in the u.s. then in 2004 i

roseman here today officers inside the organization and the bottom line is to figure out what we willense what we have seen in other problems in the marketplace is there are those who say if we had dodd/frank and placer this regulation or this, and people jump to conclusions to try to overreact. we want to get to the bottom of what happened then make a finding. one of the things i think we have seen when we look back at the 2008 crisis coming people said there was lack of regulation but the truth is had retaken the time to ascertain what happened and, we could have found 2,008 have been did not because we did not have enough regulation but regulators not doing their jobs comment marking behavior that was not acceptable. the purpose of this hearing and those of the past is to get to the bottom of that so i look forward to hearing from our witness is today. with that i yield to the ranking member. >> thank you. another series of this issue i have not met any person that knows much about everybody that i knew i simply asking questions and for me as a supporter of dodd/frank i have no ide