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

News Developments

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

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