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CFTC charges Corzine, O'Brien in MF Global failure

Keywords: Tags  mf global, Jon Corzine, Edith O'Brien, commodity futures trading commission, CFTC, bankruptcy, london metal exchange, everdeen mason


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 O’Brien for the company’s 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 company—a subsidiary of which, MF Global UK, was a London Metal Exchange member firm—for, among other things, allegedly violating customer protection laws.

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 O’Brien.

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).


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