According to various sources, CME Group, Inc may face liability for misleading regulators over what it knew about MF Global Holdings Ltd.
Examiners from Chicago-based CME Group found unexplained wire transfers at the broker-dealer unit of MF Global and a $900 million shortfall in client funds during the weekend the failing broker MF Global was talking with possible buyers.
CME, the world’s largest futures exchange oversees its futures-broker members such as MF Global under its authority as a self- regulatory organization, noticed the shortfall by October 30th about a day before the CFTC said they were told of the missing funds.
According to the CFTC, a self-regulatory organization like CME Group must provide immediate notification when a member has failed to segregate or has misused customers’ funds.
CME Group claims that it followed CFTC requirements and CME rules and procedures in reviewing MF Global’s segregated funds statements and coordinating that review with the CFTC.
