MF Global to pay $1.21 billion restitutionNovember 18, 2013 @ 10:35 am
WASHINGTON (AP) - MF Global Inc. must pay back $1.21 billion to ensure customers recover their losses sustained when the brokerage firm failed in 2011.
The restitution is being levied following a complaint filed by the U.S. Commodity Futures Trading Commission earlier this year that alleges MF Global unlawfully used customer funds for the firm's needs in its final weeks.
MF Global Holdings, the New York-based parent company, imploded in October of 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 discovered 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 commission said Monday that a federal court has approved the consent order for the fine for customer repayment.
MF Global also faces a $100 million civil penalty that must be paid after it has fully paid customers and certain creditors.
MF Global admitted in the consent order that it is liable for some of the allegations pertaining to the acts and omissions of its employees as set forward by the CFTC.
The commission is still involved with litigation against MF Global Holdings Ltd. as well as former company leaders Jon Corzine and Edith O'Brien.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
Please login below with your Facebook, Twitter, Google+ or Disqus account. Existing MyNorthwest account holders will need to create a new Disqus account or use one of the social logins provided below. Thank you.