Exclusive: Regulators know what happened to MF Global funds

Reuters News
Posted: Dec 14, 2011 2:54 PM

By Christopher Doering

WASHINGTON (Reuters) - U.S. regulators know what happened to the missing customer money from bankrupt brokerage MF Global and are working to determine whether any of the fund transfers were illegitimate, a top official told Reuters on Wednesday.

"We are far enough along the trail that we know where all the money went. Now it's just finding out which ones of those transactions are legitimate and which ones of them are illegitimate," said Jill Sommers, who is heading the Commodity Futures Trading Commission's review of MF Global.

"We certainly don't want to lead anyone to believe we don't know what happened. We do know, and we see where all the transactions went," she said.

In an interview, Sommers told Reuters that just because money was transferred out of a customer account to the broker-dealer account "doesn't mean it was illegitimate."

She declined to reveal details on the fund transfers until investigators have determined the purpose of all the transactions.

There is no timetable for when the review will be complete, but investigators are making "really good progress every day," said Sommers.

Investigators are searching for as much as $1.2 billion in missing customer money. Regulators have said the firm may have diverted the funds for its own needs as it suffered a liquidity crisis.

(Editing by John Wallace)