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U.S. fines Morgan Stanley for not segregating client funds

By Douwe Miedema WASHINGTON (Reuters) - The Commodity Futures Trading Commission on Thursday fined Morgan Stanley <MS.N> $490,000 for violating rules that require futures brokers to protect clients by keeping their money segregated from other funds on the bank's books. Morgan Stanley's futures trading unit transferred some $16 million from a segregated client account in 2013, and it also mixed segregated funds and its own money during a six-month period in 2012.

FCStone can keep $15.6 million Sentinel bankruptcy payout

By Tom Polansek CHICAGO (Reuters) - Commodities brokerage INTL FCStone Inc can keep a $15.6 million payout of customer funds related to the bankruptcy of Sentinel Management Group in 2007, a U.S. appeals court has ruled. The decision, issued on Wednesday by three U.S. appeals court judges in Chicago, overturned a federal district court's previous order that New York-based FCStone return the money to the trustee overseeing Sentinel's bankruptcy.

FCStone can keep $15.6 million Sentinel bankruptcy payout

By Tom Polansek CHICAGO (Reuters) - Commodities brokerage INTL FCStone Inc can keep a $15.6 million payout of customer funds related to the bankruptcy of Sentinel Management Group in 2007, a U.S. appeals court has ruled. The decision, issued on Wednesday by three U.S. appeals court judges in Chicago, overturned a federal district court's previous order that New York-based FCStone return the money to the trustee overseeing Sentinel's bankruptcy.

Acting U.S. CFTC head pleads with Congress for more money

By Sarah N. Lynch WASHINGTON (Reuters) - The acting head of the U.S. derivatives regulator pleaded with federal lawmakers on Thursday to give his agency more funding, saying a tight pocketbook has prevented staff from completing compliance exams and threatened to hobble enforcement.

Judge allows customers' lawsuit against MF Global's Corzine

By Nate Raymond NEW YORK (Reuters) - A federal judge on Tuesday allowed a lawsuit to move forward that seeks to hold former MF Global Holdings Ltd Chief Executive Officer Jon Corzine and other executives responsible for the brokerage's collapse. U.S. District Judge Victor Marrero said that it was reasonable to infer someone "did something wrong to set in motion such an extraordinary chain of events causing such extensive harm to so many people and interests."

Sentinel trustee wants Bank of NY Mellon to return $337 million

By Sakthi Prasad (Reuters) - Bank of New York Mellon should be ordered to return about $337 million to Sentinel Management Group Inc, a U.S. futures broker that went bankrupt in 2007, according to a court filing made by the bankruptcy trustee. Sentinel's bankruptcy trustee, Frederick Grede, alleged that the futures broker pledged hundreds of millions of dollars in customer assets to secure an overnight loan from Bank of New York Mellon, leaving the bank in a secured position but Sentinel's customers with losses worth millions.

MF Global to pay $1.21B restitution to customers, $100M penalty following CFTC complaint

WASHINGTON - MF Global Inc. must pay back $1.21 billion to ensure customers recover their losses sustained when the brokerage firm failed in 2011. The restitution is being levied following a complaint filed by the U.S. Commodity Futures Trading Commission earlier this year that alleges MF Global unlawfully used customer funds for the firm's needs in its final weeks. MF Global also faces a $100 million civil penalty that must be paid after it has fully paid customers and certain creditors.

CFTC fails to show Corzine didn't supervise MF Global, ex-CEO says

By Carlyn Kolker NEW YORK (Reuters) - The Commodity Futures Trading Commission's lawsuit against former MF Global chief executive Jon Corzine should be dismissed because it fails to show that he didn't properly oversee the failed brokerage firm, Corzine said in newly filed court documents. Corzine was charged in June by the CFTC with violating his legal obligations to diligently supervise employees and not acting in good faith as a "control person" at the futures brokerage firm.

U.S. regulator opposes fast-track CFTC markets policing

By Douwe Miedema WASHINGTON (Reuters) - The U.S. derivatives regulator needs to better explain how it goes about cracking down on wrongdoers, one of its commissioners said on Monday calling on Congress to conduct a full review. Scott O'Malia, the only Republican member of the Commodity Futures Trading Commission, wants Congress to review the regulator's internal policies and procedures in enforcement.

In their words: Phone conversations show desperation in last days before MF Global failure

The Commodity Futures Trading Commission filed a civil lawsuit against former New Jersey Gov. Jon Corzine on Thursday, laying on him responsibility for the misuse of customer money while he headed brokerage firm MF Global, which collapsed in 2011. The agency also sued Edith O'Brien, who was an assistant treasurer at MF Global with the authority to approve transfers of customer funds. The agency obtained recordings of phone calls among MF Global employees, and put snippets from them into the lawsuit:
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