Federal Court Orders MF Global to Pay $1.2 Bln in Restitution - CFTC

Federal Court Orders MF Global to Pay $1.2 Bln in Restitution - CFTC

Court imposes $100 million fine on defunct MF Global brokerage

A federal court in New York ordered MF Global Holdings Ltd. to pay $1.212 billion in restitution to its customers for unlawful use of customer funds by its commodity trading subsidiary MF Global Inc. and a $100 million penalty, the U.S. Commodity Futures Trading Commission said on Wednesday.

The CFTC said it obtained the federal court consent order against MF Global. The CFTC previously filed and settled charges against MFGI for misuse of customer funds and related supervisory failures in violation of the Commodity Exchange Act and CFTC Regulations.

Related: MF Global Settlement Reached

Court imposes $100 million fine on defunct MF Global brokerage

The consent order arises out of the CFTC's amended complaint, filed on December 6, 2013, charging MFGH and the other defendants with unlawful use of customer funds. In the Order, MFGH admits to the allegations pertaining to its liability based on the acts and omissions of its agents as set forth in the consent Order and the amended complaint, the CFTC said.

MF Global collapsed in 2011 when federal regulators reported an estimated $1.2 billion may be missing from customer accounts.

Farmers, ranchers and rural businesses such as grain elevators and feed mills were hit hard when they were cut off from the cash in their hedging accounts at MF Global after it made a bad bet on European government debt.

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