facebook
twitter
search
search

MF Global to pay back customers $1.2 billion, per court order

MF Global, the largest Wall Street collapse since Lehman Brothers, is to pay clients $1.2 billion after misusing their funds in failed derivatives trading.
Posted By Sonali Basak   |   Nov. 18, 2013 at 4:09 PM
| License Photo

Nov. 18 (UPI) -- Former New Jersey governor Jon Corzine's failed brokerage firm, MF Global, was ordered Monday by a U.S. district court to pay $1.2 billion back to its customers after misusing client funds.

MF Global filed for bankruptcy in 2011, and it is the largest Wall Street collapse since Lehman Brothers' 2008 fall. The fine is a full restitution of more than $1 billion in funds taken out of clients' accounts to cover up failed company bets on European sovereign debt.

The clients included in the payback range from farmers in Kansas to hedge funds in Connecticut. The payment also includes a $100 million civil penalty to be paid to the government after customers are paid back.

The company was a major commodities brokerage firm with a history riddled with scandal. The firm has had to pay regulators tens of millions in fines from 2008 to the present due to misused funds and improper risk regulation.

The U.S. Commodities and Futures Commission announced the payout on Monday, after filing the initial complaint in June. The CFTC has tightened regulations on derivatives trading since the 2008 crisis, as many regulators blamed risky derivatives investing as a catalyst to the crisis, and the subsequent recession.


[Wall Street Journal]
[NYT Dealbook]
[USA Today]
[Wall Street Journal]

Related UPI Stories
Topics: Jon Corzine
Top Stories
Why the fake braces trend may be dangerous for users
Jared Leto 'stopped eating' for his 'Dallas Buyer's Club' role
Kelly LeBrock arrested for DUI
Gisele Bundchen, Tom Brady drop $14M on Manhattan home
Brandi Brandt faces drug charges in Australia