Dec 24, 2014 2:11 PM
MF Global Holdings to pay $1.21B in restitution
The Associated Press
MF Global Holdings Ltd. must pay $1.21 billion to reimburse customers for losses sustained when the brokerage firm failed in 2011.
The Commodity Futures Trading Commission said Wednesday that a New York court required the payment to ensure that claims made of its subsidiary, MF Global Inc., are paid. The order also imposed a $100 million civil penalty on MF Global Holdings. The company admitted to unlawful use of customer funds as charged by the CFTC.
MF Global Inc. had already settled with the CFTC in 2013. It was required to repay $1.21 billion to its customers, plus a $100 million penalty.
MF Global Holdings, the New York-based parent company, imploded in October 2011 after making big bets on bonds issued by European countries that later turned sour. When it collapsed, more than $1 billion in customer money was discovered to be missing. It was later found that the funds were used to pay for the company's own operations. With $41 billion in assets, it was the eighth-largest corporate bankruptcy in U.S. history.
The CFTC said Wednesday that litigation continues against Edith O'Brien, who had been MF Global's assistant treasurer, and MF Global's former leader, Jon Corzine. Corzine is a former chief of Goldman Sachs, a former Democratic U.S. senator and the former governor of New Jersey.