CFTC Inspector General Report on the CFTC's Oversight and Regulation of MF Global, Inc. Published

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Published Date : May 21, 2013

Today Senator Richard Shelby made public a CFTC Inspector General report dated 16 May 2013 regarding the Commission's oversight and regulation of MF Global, Inc. This review had been requested by Senator Shelby on 30 November 2011.

As part of its review, the IG reviewed, among other things:

• the CFTC's role overseeing and regulating MFGI;
• the CFTC's activities with respect to MFGI in the week prior to its liquidation; and
• the decision of Chairman Gensler to recuse himself from matters related to the CFTC's MFGI investigation.

Although there appears to be no new material information in the IG report about the events leading to the demise of MFGI, there are a number of interesting findings:

• As early as October 26, 2013, Chairman Gensler predicted it likely that MFGI could collapse by the end of that week (it did);
• The CFTC had no examination manual or other guidance for staff involved in overseeing and regulating MFGI or any other FCM, or for monitoring CME's oversight of MFGI or any other FCM;
• But for an overheard conversation on October 31, 2011, CFTC staff would not have been aware that the SIPIC trustee was about to file a proceeding against MFGI using pleadings that did not protect the interests of MFGI's FCM's customers;
• Chairman Gensler often used personal emails to conduct official CFTC business (he  has stopped this practice); and
• Chairman Gensler withdrew from participating in the CFTC's investigation of MFGI after its demise -- despite his earlier active participation prior to its collapse -- contrary to the CFTC's General Counsel 's advice.

For the full report, see: 
http://www.shelby.senate.gov/public/index.cfm/files/serve?File_id=f403744e-e1d2-4bf1-a256-d5eb75343158

The information contained in this article is not legal advice. For legal advice, please consult with your attorney. The information in this article is derived from sources believed to be reliable as of May 21, 2013, but no representation or warranty is made regarding the accuracy of any statement. To ensure compliance with requirements imposed by U.S. Treasury Regulations, Gary DeWaal and Associates LLC informs you that any U.S. tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Gary DeWaal and Associates may represent one or more entities mentioned in this article.

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• Bridging the Week has moved.
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