MF Global Holdings Ltd : Regulators Find No Material Breaches In Review Of Futures Firms
01/25/2012| 05:18pm US/Eastern
By Jamila Trindle
The Commodity Futures Trading Commission reviewed the top futures firms and didn't find any material breaches, the agency said Wednesday.
The CFTC found that all customer funds were in place on the date of the review of each of 70 firms.
"It shows that firms understand our rules about how to treat customer funds," Commissioner Bart Chilton, a Democrat, said in a statement.
The CFTC said that it didn't perform an "audit" of the companies but rather a "limited review," which relied on the records and documents maintained at the firms.
"Staff did not confirm balances directly with depositories or other entities holding customer funds," the CFTC said in a statement.
The CFTC launched the inspections after the collapse of MF Global Holdings Ltd. (MFGLQ) exposed a $1.2 billion shortfall in money kept on deposit with the firm by clients such as ranchers, hedge funds and floor traders at exchanges. Nearly three months after MF Global's collapse on Oct. 31, a probe led by the CFTC and Federal Bureau of Investigation has yet to find the missing money.
The CFTC said it reviewed 70 futures firms that held customer money, out of a total of 120 firms that are registered with the agency.
The review was conducted by staff from the CFTC as well as exchange-operator CME Group Inc. (CME) and the National Futures Association, the industry's main self-regulatory body.
CFTC staff reviewed the largest 14 firms while CME and NFA staff reviewed the others.
The CFTC said it found that the firms held about $166 billion in customer funds altogether.
-By Jamila Trindle, Dow Jones Newswires; 202-862-6684; firstname.lastname@example.org
--Jacob Bunge contributed to this article.