Arguably no scandal in the history of the futures industry has done as much damage as the MF Global debacle in the fall of 2011. The reason is that it challenged one of the core underpinnings of the futures industry—that customer segregated funds would remain segregated from the rest of the capital in a futures commission merchant (FCM) so that it would not be at risk even if the FCM itself failed.
Jon Corzine, former New Jersey governor and Goldman Sachs (GS.N) co-chairman, will pay a $5 million civil fine to settle a U.S. regulator's lawsuit over the 2011 collapse of his commodity brokerage, MF Global Holdings Ltd.
MF Global Inc. Trustee James Giddens declared the liquidation of MFGI "essential complete" after gaining approval of a final 95% distribution to allowed unsecured creditors on top of the 100% distribution ($6.9 billion) for customer claims.
The secured claims consists of mainly employee wage priority claims and CME Group claims; the unsecured general creditor claims include claims filed by introducing brokers, trade vendors, employees, and others according to the spokesman.
PwC, which provided auditing and accounting experts, failed to advise the firm to account properly for its European sovereign debt holdings, leading it to invest too much in them, MF Global said in a complaint.