By Mark Melin
In a meeting on February 21, the National Futures Association Board of Directors did not immediately act on a motion to ban former MF Global CEO Jon Corzine for life, but left open the possibility for the self regulator take action after ongoing investigations by government agencies are complete.
"Once the appropriate agencies have completed their investigations, NFA has the authority to bring disciplinary action against Mr. Corzine for violations of any NFA rules that occurred while he was a member," according to a statement from the NFA. "The sanctions for disciplinary actions could include a lifetime ban and significant monetary fines."
While published reports noted Mr. Corzine was no longer a member of the NFA, materially he was a member during the time criminal activity occurred at MF Global.
"The Board notes that Mr. Corzine is not currently a member of NFA. The Board is aware of publicly available information that raises issues concerning Mr. Corzine's fitness for NFA membership," the statement said, likely alluding to the fact that information in the public domain that points to criminal activity. "If Mr. Corzine applies for membership in the future, he will not be granted membership unless NFA, after completing its fitness investigation, resolves those issues to its satisfaction."
Going into the meeting, popular support indicated potential for board members to approve the measure. The measure was brought by Commodity Customer Collation co-founders and newly elected NFA Board members James Koutoulas and John Roe, who were fulfilling a campaign pledge to bring the issue to a vote.
At the time of the meeting speculation indicated the NFA board had mixed feelings about the proposal. The point of the proposal was to bring accountability to criminal actions that appeared to be eluding investigation. While damage done to the commodity markets has been significant, the validity of the MF Global investigation had always been questioned by knowledgeable industry participants. This suspicion is due, in part, to sources close to the investigation being quoted in several news stories diminishing prospects of an investigation, saying the "case was cold" before the primary suspects, MF Global executives, had been questioned and while clear indications of criminality existed in the public realm. Arguments that weighted against the motion likely included jurisdictional issues with other regulatory agencies and interference with ongoing investigatory efforts, analysis first reported the day of the meeting.