Fri, Mar 6, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Opalesque Futures Intelligence

The Untold Story: CME Group Independent Investigation Halted
Why was an investigation into MF Global halted by the CFTC just as promising results towards uncovering truth were announced?

Wednesday, November 14, 2012

CME Group Independent Investigation Halted

By Mark Melin

CFTC Commissioner Bart Chilton wrote in the book Ponzimonium that confusion is a trademark of the fraudster. The narrative surrounding MF Global has always centered around "chaos" and "complexity." However, one investigation knew exactly where to find truth.

Because it had front line authority over MF Global, the CMEGroup's investigation was highly anticipated by industry observers as providing clear indications as to criminal behavior. Leading up to Congressional testimony of December 13, 2011, the CMEGroup investigation was said to be gaining steam, close to clearly documenting criminal activity. In Congressional testimony CMEGroup Chairman Terry Duffy noted progress, pointing specifically to knowledge by senior MF Global executives of potential criminality in the illegal funds transfers.

The following day, the CFTC is said to have halted the CMEGroup's investigation. According to Washington D.C. sources, financial investigations conducted by the Department of Justice (DOJ) rely on financial regulators such as the SEC or CFTC relative to potential criminal charges. DOJ would typically not act without such a recommendation. It is this recommendation the DOJ currently awaits to receive from the CFTC, according to sources.

A halt in this investigation has not been explained, but following the abrupt halt the CMEGroup then became subject of an investigation.

As several books document, fraud is often accompanied by attempts to confuse or distract those from discovering the clear facts in the case.

As the MF Global investigation was underway, a curious component of the case included the fact that sources claiming to be related to the investigation had continually leaked information to the New York Times, Wall Street Journal and Reuters claiming the investigation was ending without criminal indictments. Such press statements from officials close to the investigation was highly unusual, particularly as some of the claims "the case was cold" occurred even before questioning of some the leading suspects, MF Global executive officers, took place.

Sources in Washington D. C. speculate such leaks likely had a source from officials at the CFTC, as the Department of Justice is still waiting for a recommendation from the agency. Thus, even if a source at DOJ were to have leaked information it may have been based on what it was told from the CFTC.



 
This article was published in Opalesque Futures Intelligence.
Opalesque Futures Intelligence
Opalesque Futures Intelligence
Opalesque Futures Intelligence
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. SkyBridge opens office in Palm Beach County[more]

    Where better for a southern location than South Florida? SkyBridge Capital, which is headquartered in New York, has opened an office in Palm Beach Gardens. Palm Beach Gardens is a "Signature City" in northern Palm Beach County, with a population of around 49,000.

  2. Outlook - Philippe Jordan predicts 'alternative beta' to displace hedge funds, Stan Druckenmiller says Europe, Japan stocks will outpace U.S.[more]

    Philippe Jordan predicts 'alternative beta' to displace hedge funds From Investordaily.com.au: The disappointing performance of hedge funds in recent years is a result of "too much money chasing too little alpha", argues Capital Fund Management. Speaking to InvestorDaily, CFM partner Phi

  3. Investing - As rig count falls, hedge funds pile into long crude futures, Parus tactically shifts long/short exposure ratios, Mario Draghi outflanking Kuroda as bearish euro bets surge, Prime Capital’s 500.com bet derailed after 41% drop[more]

    As rig count falls, hedge funds pile into long crude futures From 247wallst.com: In the week ended February 27, the total number of rigs drilling for oil in the United States came in at 986, compared with 1,019 in the prior week and 1,430 a year ago. Including 281 other rigs mostly drill

  4. Outlook - 5 reasons why 2015 is looking like a breakout year for alternative investments, Hedge fund manager Dan Loeb predicts disappointment for funds seeking energy distress[more]

    5 reasons why 2015 is looking like a breakout year for alternative investments From Forbes.com: …After a strong 2014, the public markets have been off to a choppy start in 2015. This year, savvy investors may be looking for alpha elsewhere. For many institutions and high-net-worth indivi

  5. Event-driven strategies lead hedge fund gains in February while CTA rally shows signs of fatigue[more]

    Komfie Manalo, Opalesque Asia: Hedge funds ended February on a good note (+0.8%), confirming the positive momentum witnessed since the start of the year, reported Lyxor Asset Management in its Weekly Briefing. As of the end of February, the Lyxor He