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By Mark Melin

The MF Global investigation is expected to be entering its final stages after two and a half years of on again, off again activity.

There will be several paths the investigation could take, the most likely of which starts at the CFTC. The derivatives regulator could make a recommendation to criminally indict certain MF Global executives, including Jon Corzine, the former US Senator and Governor of New Jersey and onetime president of Goldman Sachs.

If a recommendation for criminal charges is made by the CFTC, it could ultimately move to the Department of Justice for review with a likely stop at the Obama White House before approval. This is the primary path being watched, but other scenarios with different probability factors exist.

Under this scenario there will be three initial key points to watch at the CFTC and three key points to watch at the DOJ and in the Obama administration.

The first transition point is likely to be the resignation of CFTC Commissioner Jill Sommers, who is currently commissioner in charge of the MF Global investigation. Commissioner Sommers was scheduled to resign at the end of March.

In her oversight capacity, Commissioner Sommers is expected to be replaced by senior CFTC Commissioner Bart Chilton.

Ms. Sommers MF Global experience likely involved frustration. Placed in a politically hot situation, she had the unenviable task of operating in the middle of a difficult mine field that included limited information flow and documented stand down orders grinding the investigation to a halt at times.

Speculation is once Commissioner Chilton takes the administrative reigns, investigation events could become fast moving. However, it should be noted Commissioner Chilton's role, like that of Commissioner Sommers, is not as the investigator, but rather manager of the administrative process.

Initial Process Inside the CFTC
If the regulatory agency follows protocol, initial decisions regarding recommendation for criminal charges against MF Global executives will be made independently by the CFTC's New York field investigators.

The field office case description and recommendations will ultimately arrive at the desk of CFTC Director of the Division of Enforcement David Meister. A former Skadden, Arps attorney with the firm's white collar crime group, Mr. Meister previously served as Assistant US States Attorney for the Southern District of New York. It is unknown if Mr. Meister is friendly with Skadden, Arps bankruptcy attorney, Kenneth Ziman, who played a role in the MF Global bankruptcy process.

Mr. Meister will be key towards determining if criminal charges are filed against MF Global executives. It is unknown who, if anyone, Mr. Meister will consult on the decision, but consultation with the CFTC Commissioner in charge of the MF Global investigation is possible.

If Mr. Meister recommends criminal charges, the issue is likely to go before CFTC Commissioners for a vote on the topic. If CFTC commissioners approve recommendations for criminal action, a case referral to the Department of Justice is likely.

These are the initial points to consider when watching the initial benchmarks in the MF Global investigation, as a number of variables can change based on the scope and clarity of Mr. Meister's recommendation.

For additional reporting on the MF Global criminal incident, click on this link to visit www.uncorrelatedinvestments.com (requires free registration).