Former MF Global CEO Jon S. Corzine has been ordered to pay a $5 million penalty for his role in the misuse of nearly $1 billion in customer funds, the U.S. Commodity Futures Trading Commission (CFTC) announced Thursday. The federal court consent order, entered by Judge Victor Marrero of the U.S. District Court for the Southern District of New York, also permanently bars Corzine from acting in any official capacity with a Futures Commission Merchant (FCM) or registering with the CFTC.
The CFTC’s investigation, stemming from a complaint filed in December 2013, found that while CEO of MF Global from September 1, 2010, through October 31, 2011, Corzine oversaw the unlawful use of customer segregated funds to prop up the failing firm’s operations and pay off other creditors. The funds were improperly diverted during the last week of October 2011.
Edith O’Brien, former Assistant Treasurer of MF Global, also faced penalties. She was ordered to pay a $500,000 civil monetary penalty and is prohibited from associating with an FCM or registering with the CFTC for 18 months, for aiding and abetting the violations. O’Brien supervised the Treasury Department and was responsible for directing the transfers of customer funds.
The penalties against Corzine and O’Brien follow previous orders against MF Global and its parent company, MF Global Holdings Ltd., which mandated restitution to cover all customer claims. The CFTC emphasized that the resolution underscores its commitment to protecting customer funds.
“This resolution demonstrates the importance that the Commission attaches to customer protection, which has long been a hallmark of our mission,” stated Aitan Goelman, the CFTC’s Enforcement Director. The court found that MF Global violated the Commodity Exchange Act and CFTC regulations by failing to properly segregate and account for customer funds, commingling them with company assets, and using them for unauthorized purposes.
The case was filed in New York on January 5, 2017.
Source: CFTC.gov
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