Grand Jury Looking into Failure of MF Global

- by

Washington, DCAn MF Global lawsuit was pushed into the spotlight yet again recently with the revelation that a federal grand jury in Chicago is looking into the trail of a missing $1.6 billion in assets, asserted a recent report by The Associated Press.

Allegations in the MF Global stock case center on whether client investments—which by law and regulation are supposed to be kept separate from corporate cash and operating funds—were used to fund the short-term financial and operational needs of MF Global. Were that proven to be true, MF Global funds and its officers would be in violation of various guidelines which govern investor/investment relations.

AP reported February 28 that CME Group Inc., a financial exchange operator, recently revealed in its annual report that it has been subpoenaed by the grand jury, the latter interested in acquiring documents and witnesses related to the MF Global securities mystery surrounding the missing $1.6 billion.

Former New Jersey Governor Jon Corzine, who formerly headed MF Global, has stated he has no knowledge as to the whereabouts of the missing funds.

There are various allegations that the principles of MF Global futures misused investor funds during a pivotal period of MF Global's recent history, when the firm teetered on the brink of bankruptcy before finally filing for bankruptcy protection October 31 of last year.

The grand jury issued its first subpoena just one day later, on November 1. A subpoena was also issued from the Commodity Futures Trading Commission (CFTC), which was identified in the AP report as the lead regulator looking into the collapse of MF Global and allegations of MF Global securities fraud.

The CFTC issued its subpoena to CME Group November 3.

CME Group is embroiled in the MF Global debacle given its ownership of the Chicago Mercantile Exchange, together with the New York Mercantile Exchange. In that capacity, CME Group had a responsibility—among others—to audit MG Global's ongoing financial performance.

In its annual report, CME Group noted that the failure of MF Global and the missing investor funds have caused regulators to scrutinize existing practices and protocols inherent with the monitoring and protection of customer accounts. Nonetheless, it is alleged that CME Group was partly to blame for losses related to MF Global.

The failure of MF Global securities is alleged to have cost $29.1 million last year. CME Group also asserted that a drop in trading volume was due to the failure. Various civil lawsuits and an MF Global lawsuit are expected to be consolidated in federal court in New York.

MF Global Legal Help

If you or a loved one have suffered losses in this case, please click the link below and your complaint will be sent to a securities fraud lawyer who may evaluate your MF Global claim at no cost or obligation.

Add Your Comment on This Story

Please read our comment guidelines before posting.

Note: Your name will be published with your comment.

Your email will only be used if a response is needed.

Request Legal Help