CFTC Internal Watchdog Prepares for MF Global Oversight Review
The U.S. Commodity Futures Trading Commission’s internal watchdog will review the agency’s oversight of MF Global Holdings Ltd’s brokerage after “immediate concerns” about as much as $1.2 billion in client funds are resolved, said Judith Ringle, attorney-adviser in the inspector general’s office.
The watchdog’s office is waiting for James W. Giddens, the trustee overseeing the liquidation of the bankrupt broker, to determine when the concerns are resolved before beginning the review, Ringle said today in an interview. The parent company, MF Global Holdings Ltd., filed for bankruptcy protection on Oct. 31.
The CFTC, Securities and Exchange Commission, Justice Department and trustee’s office are investigating the shortfall in funds. Giddens has estimated that as much as $1.2 billion may be missing from MF Global’s customers’ accounts.
Senator Richard Shelby, an Alabama Republican, requested that the inspector general’s office investigate how the CFTC coordinated with the CME Group Inc. (CME), which had responsibility to audit MF Global’s records. Shelby also requested a review of the decision by CFTC chairman Gary Gensler to recuse himself from the MF Global investigation.
Jon S. Corzine, former MF Global chairman and chief executive officer, Bradley Abelow, the firm’s president and chief operating officer, and Dan Berkovitz, CFTC general counsel, are scheduled to testify at a hearing tomorrow of the House Financial Services subcommittee on oversight and investigations.
The panel is the third congressional committee to vote to subpoena Corzine, who has said he had no intent to authorize the misuse of customers’ funds.
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