MF Global, the securities firm led by former Goldman Sachs chief and former New Jersey Governor Jon Corzine, has admitted using clients’ money as its financial troubles mounted. An MF Global executive allegedly has admitted to federal regulators that money is missing from clients’ accounts.
MF Global was run by Jon Corzine, the former CEO of Goldman Sachs and former U.S. senator and then governor of New Jersey. Government rules require securities firms to keep clients’ money and company money in separate accounts. Violating the rule could result in civil penalties.
MF Global, which filed for bankruptcy protection Monday, faced a cash crunch after making a $6 billion bets on European sovereign debt. In August 2011, the Financial Industry Regulatory Authority (FINRA) instructed MF Global to increase its required net capital because of its exposure to European debt. It appears that MF Global may have used hundreds of millions of dollars of customers’ money in an attempt to shore up the its finances.
The company’s main exchange regulator, CME, said that MF Global did not separate its customers’ accounts from the firm’s funds as required by law. “CME has determined MF Global is not in compliance with Commodity Futures Trading Commission and CME customer segregation requirements,” CME Group Inc. Chief Executive Craig Donohue said.
MF Global and Corzine have not yet been accused of wrongdoing, but CME and the FBI are looking into exactly what happened at MF Global. If MF Global actually misused customer money, as it appears, investors may be able seek recovery of their investment losses through FINRA arbitration, NFA arbitration, or court cases.
Dimond Kaplan & Rothstein, P.A. represents MF Global investors and is exploring the various options available to recover MF Global investment losses. If you are an MF Global investor, please contact attorney Jeffrey Kaplan at (888) 578-6255 or email@example.com for free consultation.