MF Global broke customer cash rules
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Stockbroker MF Global broke rules requiring it to safeguarding client’s money, the firm’s regulator has claimed.
CME Group chief executive officer Craig Donohue says the firm broke laws that required brokers’ to keep their customers’ money separate from other customers’ money as well as the company’s own funds.
He said: “CME has determined MF Global is not in compliance with Commodity Futures Trading Commission and CME customer segregation requirements,”
The CME Group runs the Chicago Mercantile Exchange.
MF Global filed for Chapter 11 bankruptcy yesterday. The firm has 2,000 staff, including 600 in London.
The FSA announced on Monday that stockbroker MF Global UK has entered a special administration regime.
Richard Fleming, Richard Heis and Mike Pink of KPMG LLP have been appointed as joint special administrators. The move follows a decision taken by the board of MF Global UK.
The special administration regime was formed in February 2011 following the collapse of Lehman Brothers and differs from the traditional administration route in that it sets special objectives for the administrator.
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