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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.