CFTC ACTION: MF Global

The CFTC announced the filing and simultaneous settlement of charges against MF Global Inc., a registered futures commission merchant, and its predecessor corporation, Man Financial Inc. relating to risk supervision failures in four separate instances between 2003 and 2008. MF Global failed in four separate instances to ensure that its risk management, supervision and compliance programs comported with its obligations to supervise diligently its business as a CFTC registrant. MF Global also failed to implement procedures to ensure appropriate transmission of price indications to the MF Global customer for certain natural gas options.
The CFTC order imposes a $10 million civil monetary penalty on MF Global. The order also requires MF Global to comply with several undertakings, including enacting policies and procedures to enhance risk monitoring procedures, training, compliance procedures and compliance audit procedures. MF Global will also undertake an Independent Review and Assessment, which will be conducted by Eugene Ludwig of Promontory Financial Group. The Assessment will, among other things, review the effectiveness of existing and future risk management, supervisory and compliance policies and procedure at MF Global.

About The Author

Felix Shipkevich

Felix Shipkevich is a Manhattan-based attorney and general counsel for Shipkevich Law Firm. He has extensive experience working with the CFTC and NFA on registration, compliance, and enforcement issues for CPOs, CTAs, FCMs, IBs, and RFEDs. Felix also practices intellectual property and corporate governance law.