November 1, 2011,CME Investigating MF Global
By BEN PROTESS and MICHAEL J. DE LA MERCED
One of the New York offices for MF Global, the brokerage firm run by Jon S. Corzine.Justin Lane/European Pressphoto AgencyOne of the New York offices for MF Global, the brokerage firm run by Jon S. Corzine.
“While we are unable to determine the precise scope of the firm’s violation at this time, we are investigating the circumstances of the firm’s failure,” CME’s chief executive, Craig Donohue, said during the company’s earnings call on Tuesday.
By late Monday, more than $600 million was still unaccounted for at MF Global. While it is unclear where the money went, some of the money is expected to turn up as MF Global sorts through the bankruptcy process.
DealBook first reported on Monday that federal regulators were investigating why customer money had gone missing from MF Global in recent days. One thought, people briefed on the matter said, is that banks holding the money were slow to produce it. But regulators are also examining whether MF Global diverted some customer money to support its own trades as a last-ditch effort to save itself.
Neither MF Global nor Mr. Corzine has been accused of any wrongdoing.
The revelation that money was missing dashed plans to sell a major part of MF Global to a rival brokerage firm, the Interactive Brokers Group. After Interactive Brokers discovered the missing money, the deal collapsed in the middle of the night on Monday, forcing MF Global to file for bankruptcy.
On Monday, as MF Global scrambled to file its bankruptcy papers, CME and other exchanges suspended the firm from trading. CME said it took “emergency action” to only allow MF Global customers to liquidate their accounts.
CME stripped MF Global traders of security clearance, preventing them from accessing the trading floors.
“We recognize that yesterday was a very difficult day for all concerned,” Mr. Donohue said. “As is nearly always the case in matters like this, this is a very fluid situation involving complex legal, regulatory and bankruptcy related issues.”
By BEN PROTESS and MICHAEL J. DE LA MERCED
One of the New York offices for MF Global, the brokerage firm run by Jon S. Corzine.Justin Lane/European Pressphoto AgencyOne of the New York offices for MF Global, the brokerage firm run by Jon S. Corzine.
“While we are unable to determine the precise scope of the firm’s violation at this time, we are investigating the circumstances of the firm’s failure,” CME’s chief executive, Craig Donohue, said during the company’s earnings call on Tuesday.
By late Monday, more than $600 million was still unaccounted for at MF Global. While it is unclear where the money went, some of the money is expected to turn up as MF Global sorts through the bankruptcy process.
DealBook first reported on Monday that federal regulators were investigating why customer money had gone missing from MF Global in recent days. One thought, people briefed on the matter said, is that banks holding the money were slow to produce it. But regulators are also examining whether MF Global diverted some customer money to support its own trades as a last-ditch effort to save itself.
Neither MF Global nor Mr. Corzine has been accused of any wrongdoing.
The revelation that money was missing dashed plans to sell a major part of MF Global to a rival brokerage firm, the Interactive Brokers Group. After Interactive Brokers discovered the missing money, the deal collapsed in the middle of the night on Monday, forcing MF Global to file for bankruptcy.
On Monday, as MF Global scrambled to file its bankruptcy papers, CME and other exchanges suspended the firm from trading. CME said it took “emergency action” to only allow MF Global customers to liquidate their accounts.
CME stripped MF Global traders of security clearance, preventing them from accessing the trading floors.
“We recognize that yesterday was a very difficult day for all concerned,” Mr. Donohue said. “As is nearly always the case in matters like this, this is a very fluid situation involving complex legal, regulatory and bankruptcy related issues.”
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