MF Global Independent Counsel Sought by Republican Congressman

A U.S. House Republican lawmaker has asked colleagues to support his request that the Department of Justice appoint an independent counsel to investigate the failure of MF Global Holdings Ltd.

Representative Michael Grimm of New York circulated a draft letter yesterday asking Attorney General Eric Holder to appoint the counsel to “take over the investigation into possible wrongdoing surrounding the collapse of MF Global,” according to the letter.

Grimm’s letter, which has not been sent to the Justice Department, cites potential conflicts between the firm’s former Chief Executive Officer Jon S. Corzine, the former Democratic senator and governor from New Jersey, and his relationships with government officials like Gary Gensler, the chairman of the Commodity Futures Trading Commission, as well as his past fundraising for President Barack Obama’s campaign. Gensler, who has recused himself from his agency’s investigation into the firm, worked with Corzine at Goldman Sachs Group Inc.

“There’s too many things that have gone on that lead to an inference of impropriety and for that reason a special prosecutor is warranted,” Grimm said today in an interview on CNBC. The letter states that the lawmaker has “no direct evidence” that the Department of Justice is providing special treatment in the case.

MF Global filed the eighth-largest U.S. bankruptcy on Oct. 31 after getting margin calls and bank demands for money at its brokerage unit, MF Global Inc.

U.S. lawmakers, the Department of Justice and federal regulators are probing the collapse of the firm and the role of Corzine. Four congressional panels have held hearings on the bankruptcy of the firm that has left a customer funds shortfall estimated at $1.6 billion.

The letter was first reported by Fox News.

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