MF Global's Risk Officer Said to Lack Authority. A most remarkable disclosure. At Thursday's Congressional hearing, House Committee members, seeking to identify who at MF Global was responsible for risk management at the time of its collapse, will hear company officers confirm that the executive in charge of controlling risk had been stripped of critical, essential powers. 'Riskless' Principal Transaction. The glaring gap in left the firm short-handed and unnecessarily exposed to the enormous risks posed by the firm's $6.3 billion proprietary purchase of European sovereign debt - a trade large enough to wipe out the firm if it soured, and it did. Earlier this year, MF Global replaced Michael Roseman, its CRO (chief risk officer), who had repeatedly clashed with CEO Jon Corzine over the firm's purchase of European sovereign debt.  Michael Stockman took over the position, but unlike his predecessor, Stockman he was not allowed to weigh in on the broader implications the trades might have on the firm, including whether they might undermine investor confidence. Fast forward to the last week of October and, as rating agencies downgraded the firm and investors fled, MF Global's liquidity dried up.  On 10/31/11, the firm filed for bankruptcy protection, after a deal to sell the business collapsed when it was disclosed that up to a billion in customer funds were missing. Thursday's Congressional panel will also hear testimony from federal regulators - covered in a separate BTN story, posted today, 12/15. [Source:  Dealbook, 12/14/11]