MF Global Probe Said to Investigate Use of Funds to Post Margin
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U.S. authorities are investigating whether MF Global Holdings Ltd. intentionally tapped customer funds to cover the bankrupt firm’s margin payments on European government bond trades while lawmakers press top company officials on the possible misuse of as much as $1.2 billion.
Investigators including the Securities and Exchange Commission, the Justice Department, the Commodity Futures Trading Commission and the bankruptcy trustee are reviewing the brokerage’s accounts seeking proof of fraud, which would allow them to recover some of the lost $1.2 billion, said people with knowledge of the probe who declined to be identified because the investigation is ongoing.