CFTC Watchdog Says Gensler’s E-Mails Didn’t Violate U.S. Law

Commodity Futures Trading Commission Chairman Gary Gensler didn’t violate federal record-keeping laws by using his personal e-mail for agency business during the collapse of MF Global Holdings Ltd., the agency’s watchdog said.

“We do not believe it violated any federal statute,” A. Roy Lavik, the CFTC’s inspector general, said in a July 1 letter responding to lawmakers who requested additional information about Gensler’s e-mail use in 2011 in the days before the New York brokerage’s bankruptcy filing. Lavik had reported the e-mail use in a review of the agency’s handling of MF Global.

The CFTC discourages employees from using personal e-mail to conduct official business but doesn’t prohibit the practice, Lavik said in the letter to Republican Representatives Scott Garrett of New Jersey and K. Michael Conaway of Texas. Agency policy prohibits employees from sending sensitive information to personal e-mail accounts, he wrote without saying whether Gensler used his e-mail for that purpose.

Steve Adamske, the CFTC’s spokesman, declined to comment on the inspector general’s letter.

During the weekend before MF Global filed for bankruptcy on October 31, 2011, Gensler exclusively used a personal e-mail account to communicate about the company then run by Jon S. Corzine, who worked for Goldman Sachs Group Inc. when Gensler was employed by the firm. Gensler had used personal e-mail consistently since he arrived at the agency in 2009 to set meetings and have discussions about official business.

Issa Request

Representative Darrell Issa, the California Republican who leads the House Oversight and Government Reform Committee, asked Gensler on May 30 to provide all e-mail from non-official accounts relating to his job overseeing derivatives markets, according to a letter obtained by Bloomberg News.

The committee is seeking e-mails since Jan. 1, 2009, to “better understand whether your use of personal e-mail to conduct official business was mere imprudence, or part of a larger scheme to defeat federal transparency laws,” Issa wrote to Gensler. “There is little discernible explanation for your use of personal e-mail to conduct official business.”

Gensler recused himself from the CFTC investigation into MF Global because of his prior relationship with Corzine. The CFTC sued Corzine on June 27 for failing to supervise employees at the brokerage, which reported a $1.6 billion shortfall in client funds when it collapsed.

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