MF Global's Top Lawyer Will Break Her Silence MF Global's top lawyer will break her five-month silence on Wednesday to tell Congress that she was unaware of a gaping shortfall in customer money until hours before the brokerage firm filed for bankruptcy on Oct. 31. Laurie Ferber, MF Global's general counsel, was expected to tell a House panel that she "had no reason to believe" that the firm had raided customer accounts to meet its own obligations, according to a copy of her prepared testimony. While Ms. Ferber learned of a shortfall in customer money in the afternoon of Oct. 30, she said she believed it to be an accounting error. "My impression throughout the afternoon and late into the evening was that the apparent deficit was a reconciliation issue and did not represent an actual shortfall in customer funds," she planned to tell the oversight panel of the House Financial Services Committee. Ms. Ferber, who previously worked at Drexel Burnham Lambert and Goldman Sachs, is a central figure in the collapse of MF Global and the ensuing hunt for more than $1 billion in missing money. As legal counsel, she helped oversee attempts to sell MF Global as it careened toward failure and advised the firm on a dispute over a crucial transfer of money to JPMorgan Chase. That transfer contained customer money, a fact that MF Global officials have said that they did not know at the time. The firm on Oct. 28 transferred $175 million to patch an overdrawn account at JPMorgan in London. The bank questioned the origin of the money, and an earlier related transfer, seeking assurances that it did not belong to customers. In that effort, the bank sent a letter seeking confirmation that all "past, present and future" transfers complied with laws preventing the misuse of customer money. But Ms. Ferber felt the letter was too broad, and urged JPMorgan to revise the wording. "Although I had no reason to believe that any noncompliant transfers from segregated accounts had occurred or would occur, I did not think that any individual officer or employee should be asked to issue such a broad certificate unless that employee personally had handled all such transfers or was able to review all the transactions within the available time frame," she was expected to tell Congress. Ms. Ferber then spoke to an official in MF Global's Chicago office whom JPMorgan named as the person involved in the suspect transfer. That person was not identified in Ms. Ferber's testimony, though previous Congressional testimony and news reports have identified the employee as Edith O'Brien. Ms. O'Brien, an executive in the firm's Chicago office, will also appear before the House panel but she is expected to invoke her constitutional right against self-incrimination. The employee, Ms. Ferber said, gave the impression that she would sign the JPMorgan letter "if it were limited to the two transactions that the bank had expressed an interest in." After some back and forth, JPMorgan sent a third version of the letter limiting the scope to the transfers in question. Ms. Ferber, obtaining what she saw as a "satisfactory" letter, turned it over to a colleague in the legal department. But that toned-down letter was never signed. The hearing on Wednesday, the fifth Congressional examination of MF Global's demise, will include testimony from the firm's North American chief financial officer, Christine Serwinski, and the chief financial officer, Henri Steenkamp. In his second appearance before Congress, Mr. Steenkamp is expected to offer little new insight, at least in his prepared testimony. "While I am deeply distressed by the fact that customer monies have not yet been fully repaid, I unfortunately have limited knowledge of the specific movement of funds at the U.S. broker-dealer subsidiary, MF Global Inc., during the last two or three days prior to the bankruptcy filing," Mr. Steenkamp is expected to say in his prepared testimony.