Criminal Charges May Be Unlikely in MF Global Case

Forget about seeing Jon Corzine or anybody else from MF Global in handcuffs any time soon, if at all. That New York Times Dealbook says that according to its sources, it is becoming even more unlikely that anybody will be facing criminal charges in the $12 billion missing money case. This, even though a Chicago federal grand jury “has issued subpoenas,” the Times reports.

According to the article, the federal investigators have been “unable to find a smoking gun.” Instead, they are increasingly starting to think that it was just “chaos and poor risk control systems,” the blog says, rather than a criminal act. Dealbook says that according to its sources, U.S. Attorneys Preet. Bharara and Patrick Fitzgerald are leaning towards not pressing criminal charges. Instead, there could possibly be civil charges.

However, there are still a ton of questions here. Like why the feds have not made a deal with Edith O’Brien, the MF Global staffer who was ordered to handle sending money in and out in the end days of MF Global. She said she will not speak unless she gets a deal offering her immunity from prosecution. Why don’t the feds give her the immunity she wants, and talk with her to find out the scoop?

And do you know how much of a fine MF Global could face civilly for not keeping customers’ money safe? A grand total of $140,000, a miniscule amount when compared to the $1.2 billion in missing money. Big whoop.

As for that Chicago grand jury, they haven’t heard any evidence on the case yet, something the Times says shows that the investigation hasn’t discovered anything. The news of that grand jury was revealed by the CME Group, the exchange that was supposed to be MF Global’s main regulatory body. The Times says that the CME Group wrote in its annual report that it had received two subpoenas – one from the Commodity Futures Trading Commission, and one from that grand jury, saying it had been asked “to produce information and witnesses in connection with the authorities’ investigation of the matter.”

If nobody MF Global is criminally charged, there will be increased outrage over this case, especially if it is perceived that the feds weren’t trying to dig too deep to find out what happened. Interviewing Edith O’Brien would be a good start at putting all that to rest.

Lisa Swan is a Feature Writer for the Compliance Exchange and the Wall Street Job Report. She is also a columnist for The Faster Times and a blogger for Subway Squawkers. Her work has also appeared in the New York Daily News, Yahoo Sports, Huffington Post and the books Graphical Player 2011 and Graphical Player 2010.

About Lisa Swan

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