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MF Global ordered to pay $1.3 bn in restitution, fines

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(Globalpost/GlobalPost)

Washington, Nov 18 (EFE).- A federal court has ordered brokerage MF Global Inc. to pay $1.2 billion to clients who lost money when the firm went bankrupt in 2011, the U.S. Commodity Futures Trading Commission said Monday.

Judge Victor Marrero of the U.S. District Court for the Southern District of New York also ordered that once the clients and other priority creditors have been paid, MF Global must fork over a $100 million civil penalty, the CFTC said.

These sanctions come as a consequence of the civil suit filed in June by the CFTC for MF Global's improper use of clients' funds to cover the firm's growing losses.

"Division staff have worked tirelessly to ensure that 100 percent restitution be awarded to satisfy customer losses," Gretchen Lowe, acting director of the CFTC's Division of Enforcement, said in a statement.

"The CFTC will continue to ensure that those who violate U.S. commodity laws and regulations designed to protect customer funds will be vigorously prosecuted," she said.

MF Global declared bankruptcy in Oct. 31, 2011 after losing some $6.3 billion, a large part of it from speculating on high-risk European bonds.

According to the CFTC press release, the company admits to the illegal operations carried out by its executives.

At the same time, the CFTC said that the civil suit continues to go forward against erstwhile MF Global CEO Jon Corzine and the firm's former assistant treasurer, Edith O'Brien.

Corzine, a veteran of Goldman Sachs, founded MF Global after serving as governor of New Jersey and in the U.S. Senate.

http://www.globalpost.com/dispatch/news/agencia-efe/131118/mf-global-ordered-pay-13-bn-restitution-fines