Jon Corzine, former head of MF Global, who was subpoenaed last week to testify in front of Congress, could shed some insight over where the missing MF Global funds ended.
According to James Frischling, president and co-founder of NewOak Capital, there is tremendous speculation that the $1.2 billion of customer funds that went missing in the aftermath of the MF Global debacle were used by the company to cover margin calls on bets made on European debt gone wrong.
"Clearly investment firms are barred from mingling their clients' money with the firm's proprietary investments," Frischling said. "So to the extent these accusations are true, the MF Global story will look far more like a [Bernard]Madoff story than a Lehman story."
Frischling added that now is not the time to play the blame game and it is far more important to track down the funds and understand where the missing client money has gone.
"The Congressional hearing may make for great TV or sound bites, but all efforts right now should be on the forensic work needed to follow the money," he said.