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CME Subpoenaed By Federal Grand Jury, CFTC in Probes of MF Global Collapse

CME Group Inc. (CME), the world’s largest futures exchange, said it received a subpoena from a federal grand jury investigating the October collapse of MF Global Holdings Ltd.

CME Group, which had auditing authority over the failed futures broker, has been asked to produce information and witnesses in connection with the investigation by a grand jury in the Northern District of Illinois, the Chicago-based company said in a regulatory filing today. The company also received a subpoena from the U.S. Commodity Futures Trading Commission and a document request from the Securities Investor Protection Corp. trustee handling MF Global’s liquidation, it said.

The CFTC is reviewing CME Group’s audit of MF Global before the broker’s Oct. 31 bankruptcy, when as much as $1.6 billion in client funds went missing, a person familiar with the matter said last month. The CFTC, Securities and Exchange Commission, Justice Department and bankruptcy trustees overseeing MF Global’s liquidation are investigating the possible misuse of client funds.

“We believe that we carried out our duties and responsibilities in accordance with these standards and procedures,” CME said in the filing.

Cooperating With Authorities

The grand jury subpoena was issued on Nov. 1, the CFTC subpoena came the day after that, and the request for documents by the MF Global bankruptcy trustee was made Jan. 31, according to Anita Liskey, a CME Group spokeswoman. The company is cooperating with the investigating authorities, she said.

Randall Samborn, a spokesman for U.S. Attorney Patrick Fitzgerald in Chicago, declined to comment. Fitzgerald issued subpoenas in a probe of MF Global, a person familiar with the matter said in November. A grand jury has the power to issue indictments.

MF Global, one of the largest clearing brokers at CME, used about $700 million of customer funds to “meet liquidity issues” at its broker-dealer in the days prior to the bankruptcy, according to a timeline of events released by CME Group.

New York-based MF Global’s failure marks the first time a futures broker’s bankruptcy has led to the loss of customer funds, Terrence Duffy, CME Group’s executive chairman, told a congressional panel in December.

To contact the reporters on this story: Lisa Abramowicz in New York at labramowicz@bloomberg.net; Matthew Leising in New York at mleising@bloomberg.net.

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net;

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