Sun, Apr 23, 2017
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. Opalesque Exclusive: Carden Capital bets on volatility[more]

    Bailey McCann, Opalesque New York for New Managers: Machine driven strategies are having a bit of a moment in the hedge fund world right now. Systematic funds have outperformed other strategies at a time when all ey

  2. Sprott AM to sell Canadian diversified fund business to management-led group[more]

    Komfie Manalo, Opalesque Asia: Toronto-based asset management company Sprott Asset Management LP (SAM) has entered into an agreement to sell its Canadian diversified fund business to a management-led group. Under the deal, the new group will have

  3. Investing - These hedge funds (and Madeleine Albright) are betting on a debt crisis, Hedge funds are upping their bets on the death of the traditional retailer, $20bn hedge fund recaps Corizon[more]

    These hedge funds (and Madeleine Albright) are betting on a debt crisis From Yahoo.com: There could be a big debt crisis brewing in places like China, India, Latin America and Africa -- and a growing number of investors are amassing war chests to cash in on the distress. Albright Capital

  4. Universities looking to defend endowments from Republican tax plan[more]

    From PIOnline.com: Some of the richest U.S. colleges are pushing back against scrutiny by Congress over the tax-exempt status of university endowments. Lobbying disclosure forms show almost two dozen schools such as Princeton University, University of Notre Dame and Cornell University are including

  5. Activist News - GAM touts 'tangible results' of turnaround as activist fight hots up, Bill Ackman not done with Herbalife, says his fight could get legs in May, Activist hedge fund CIAM says Euro Disney's buyout offer not fair for minority investors[more]

    GAM touts 'tangible results' of turnaround as activist fight hots up From FNLondon.com: GAM, the Swiss asset manager at the center of an attempted boardroom putsch by activist hedge fund RBR Capital, said its first-quarter results amounted to "tangible" proof that its management's plan f