Why is mf global being investigated

CFTC Commissioner Jill Sommers, who has been in charge of the MF Global inquiry, said that they now have a record of all transactions that were made in MF Global's last days—the only question that remains to be answered is if those transfers were legal or not. The question of legality is a contentious issue that has already been brought up before, as people explore the possible chance that there may be regulatory loopholes which allowed MF Global to do what it did rehypothecation, anyone?

In addition, the query of legality is a very loaded question; and will likely lead to many many other questions if ever answered. For some—who authorized the transfers? Who actually handled the transfer? And what ultimately happened to the money after it was transferred? Anyways, although this could turn into great news for MF Global customers, it seems that the report is already being questioned by Reuters itself.

But it's not clear if this means he does not know where the money has ended up, or if it's actually refuting Sommers' statement in Reuters' former report. Subscribe Sign In. Continue reading your article with a WSJ membership.

Resume Subscription We are delighted that you'd like to resume your subscription. Please click confirm to resume now. Sponsored Offers. The lawyers are loath to waive attorney-client privilege, which shields the documents from outsiders, until they have completed their review. As of late December, investigators had obtained more than 10, e-mails, interviewed more than 50 witnesses and subpoenaed about 20 people, another person briefed on the case said.

Jill E. Now, authorities have traced more than 90 percent of those subsequent transfers, people briefed on the investigation said. Customers, including farmers, hedge funds and other small traders, have been very frustrated with the pace of the investigation and the dearth of updates about their missing money. While a number of the 38, customers have been paid nearly three quarters of their money, others have yet to receive a dime.

His patience is wearing thin. Jordan, In contrast, when customer cash was missing from Sentinel Management Group, a Chicago brokerage firm that collapsed in , the trustee overseeing that case found the money within a week. While MF Global presents a greater challenge than Sentinel, given its size and the amount of money missing, the precedent underscores the importance of keeping customers informed.

While the commissioners are briefed weekly on enforcement cases, over the last three months they have only been briefed twice as a group on the status of the MF Global investigation, according to people close to the commission.

Instead, commissioners are seeking their own separate briefings on the case. Some argue that the lack of cohesion deprives investigators of the collective insight of staff members when the agency faces perhaps its greatest test. The concern implies that the money may not be missing, but is gone for good.