CFTC's Gensler backs away from MF Global; Sommers steps up

The following is from the CFTC...

Washington, DC – The Commodity Futures Trading Commission (CFTC) today announced that Commissioner Jill E. Sommers will be acting as the senior Commissioner for the agency in matters relating to the bankruptcy of MF Global, Inc. (MFGI) and the shortfall of funds in MFGI’s segregated accounts containing customer property and funds. The announcement comes after Chairman Gensler recused himself from matters relating to MFGI. The designation of Commissioner Sommers is effective immediately.

On October 31, 2011, the Commission’s Division of Enforcement opened an investigation into whether the Commodity Exchange Act (CEA) or Commission regulations were violated in connection with MFGI, and the Commission has authorized the Division to issue subpoenas.

While the Commission normally does not comment on investigations, the Commission has determined it is in the public interest to confirm the existence of this particular investigation. The Commission does not intend to provide details concerning the developments of the Enforcement investigation.

“Segregation of customer funds is at the core of customer protection in the commodity futures and options markets and must be maintained at all times,” said Commissioner Sommers. “I have complete confidence in the dedicated men and women in Enforcement to carry out the necessary investigation to get to the bottom of what happened at MFGI. Aside from the investigation, we will do everything in our power to ensure public confidence in the markets by directing a review of clearing futures commission merchants (FCMs) to determine that segregated funds are being properly maintained in accordance with the CEA and Commission regulations.”

Commission staff has been monitoring the transfer of customer positions held by MFGI, almost all of which have been transferred to other registered FCMs.

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