Fri, Apr 25, 2014
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
Banner
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: Rainwater and Blue Sky - an Australian water fund emerges[more]

    Bailey McCann, Opalesque New York: Financial reporters often tout new funds and investments as uncorrelated investments, but few can say they are uncorrelated to everything but weather. Enter Blue Sky Alternative's water fund which invests in the permanent rights to Australia's water. Sev

  2. Regulatory – Expect greater SEC scrutiny of hedge funds that share information or collaborate in advance of their trades, Alternative funds to get SEC test for leverage, liquidity[more]

    Expect greater SEC scrutiny of hedge funds that share information or collaborate in advance of their trades From Thelawyer.com: A recent Wall Street Journal article — ‘Activist investors often leak their plans to a favoured few’ — focused attention on ‘activist’ investors and stock analy

  3. …And Finally – This week's least competent criminal is Austrian[more]

    From ABCnews.go.com: A German sought by authorities for alleged fraud has been arrested in Austria — after dropping into a police station to ask officers whether he was under investigation. Police in Salzburg said the 59-year-old man walked into a police station in the city on Friday night. Sp

  4. Investing – Hedge funds find pitfalls along with profits in real estate ventures, Marcato Capital Management makes new bet on Dillard’s[more]

    Hedge funds find pitfalls along with profits in real estate ventures From Law360.com: Hedge funds have joined the rush to real estate deals and development in recent months to close the financing gap left by tightening bank standards, but attorneys say many aren't prepared for the disclo

  5. Agecroft Partners estimates 90% of hedge funds using social media[more]

    The use of social media has increased significantly within the hedge fund industry over the past couple of years. Social media is broadly used by investors as part of their due diligence process on hedge funds, by service providers in their sales efforts to hedge funds, and by hedge funds to enhance