As we now are weeks in the debacle following the bankruptcy of MF Global on Oct. 31, the latest casualty has just been announced. Already individual traders, commodity trading advisers and introducing brokers have felt sting, but now charitable foundations are beginning to as well. According to Reuters, CME Group, which has given $22 million to Chicago-area schools and charities over the past five years, has stopped making grants through its main foundation, citing the collapse of MF Global. In an effort to expedite the return of traders' funds, last month the CME gave the entire $50 million held by the CME Group Trust to traders to help offset shortfalls following the bankruptcy. Unfortunately, the CME Group Trust also was a mainstay of the exchange operator's charitable giving.
Although the Trust was established in 1969 to provide financial assistance to customers if a brokerage became insolvent, because federal laws required customer funds to be segregated made the prospect that customers actually would need the money remote. As a result, the CME board voted to turn the Trust into a charitable foundation in 2005.
Some of the largest beneficiaries of the CME have been the Renaissance Schools Fund, which supports charter schools and has received $3.1 million since 2006; the University of Chicago, which has received $2.5 million since 2006, and the Erikson Institute, which specializes in early childhood education and has received $1.625 million.
As a result of the MF Global bankruptcy, CME has put all future grant applications on hold, but has said it will honor current grant obligations.