NEW YORK The
U.S. Commodity Futures Trading Commission (CFTC) has charged MF
Global Inc., MF Global Holdings Ltd., former chief executive
officer Jon S. Corzine and former assistant treasurer Edith
OBrien for the companys alleged unlawful misuse of
nearly $1 billion of customer funds.
The CFTC filed an
enforcement action in U.S. District Court in New York June 27
against the executives and the companya subsidiary of
which, MF Global UK, was a London Metal Exchange member
firmfor, among other things, allegedly violating customer
MF Global has agreed
to settle all charges against it in a proposed order that
includes 100 percent restitution of the approximately $1
billion lost by its commodity customers when the company failed
in 2011 (
amm.com, Oct. 31, 2011).
The company was
supposed to segregate customer funds for protection, but
allegedly failed to do so (
amm.com, Nov. 4, 2011).
"I am pleased that the
MF Global trustee has agreed to settle the charges," CFTC
commissioner Jill Sommers said in a statement. "There is
nothing more important than doing everything possible to make
full restitution to all commodity customers."
If the settlement is
approved by the federal District Court and the U.S. Bankruptcy
Court, MF Global also will have to pay a $100-million penalty,
according to the CFTC.
The CFTC also is
seeking trading and registration bans against Corzine and
The Institute of Scrap Recycling Industries wrote to the
CFTC late last year asking it to provide more protection for
commodity customers (
amm.com, Dec. 7, 2012).