CFTC v. MF Global, Inc. et al., Case No. 1:11-cv-07866-VM (S.D.N.Y.). On November 18, 2013, the CFTC announced a settlement with MF Global Inc. (“MF Global”) requiring it to pay $1.212 billion in restitution to customers and a $100 million civil monetary penalty. The CFTC charged MF Global and other Defendants in June 2013 with the unlawful use of customer funds. To settle, MF Global admitted to certain allegations related to its liability. The CFTC’s litigation continues against the other defendants.
In its complaint, the CFTC alleged that MF Global violated various provisions of the Commodity Exchange Act and CFTC Regulations intended to protect customer funds and requiring diligent supervision by registrants. According to the CFTC, MF Global used customer segregated funds to support its own proprietary operations and the operations of its affiliates. In addition, the CFTC alleged that MF Global: (1) did not immediately contact the CFTC when it knew or should have known about the problems with its customer accounts, (2) made false statements in reports it filed with the CFTC that did not reveal the problems with its customer accounts, (3) used customer money to invest in illiquid securities, and (iv) did not supervise the handling of commodity interest accounts carried by MF Global and the activities of its partners, officers, employees, and agents.