Customers of MF Global Inc. to Begin Receiving Final Restitution Payments from MF Global to Satisfy More Than $1 Billion in Customer Losses as Ordered by Federal Court in CFTC Action
Company also remains subject to a $100 million CFTC penalty
Press release from U.S. Commodity Futures Trading Commission (emphasis added by Econintersect)
Washington, DCÂ – Pursuant to a federal court consent Order obtained by the U.S. Commodity Futures Trading Commission (CFTC) against MF Global Inc. (MF Global), the Trustee for MF Global has announced that the company will now begin making final distributions to its customers to satisfy its obligation of full restitution for $1.212 billion in losses sustained by customers of MF Global when the company failed in 2011.
The consent Order, entered on November 8, 2013 by Judge Victor Marrero of the U.S. District Court for the Southern District of New York (CFTC Press Release 6776-13, November 18, 2013), required MF Global to begin making final restitution payments after obtaining permission from the bankruptcy court to remedy any shortfall with funds of the MF Global general estate. Following an unsuccessful appeal by parties to related litigation, the bankruptcy court’s order allocating estate funds to satisfy customer claims has now become effective.
In addition to full restitution, the consent Order imposed a $100 million civil monetary penalty on MF Global, to be paid after MF Global has fully paid customers and certain other creditors entitled to priority under bankruptcy law.
Gretchen Lowe, Acting Director of the CFTC’s Division of Enforcement, stated,
“Throughout the Division’s investigation and ongoing litigation, ensuring full restitution to customers has been a primary focus. I am pleased that the terms of the consent Order are now being fulfilled and that these final restitution payments will satisfy the remaining shortfall. The CFTC will continue to ensure that those who violate U.S. commodity laws and regulations designed to protect customer funds will be held accountable.”
