Investment bankers who found the now famous co-mingled client accounts leading to the disappearance of client money when examining MF Global's books in the days before its bankruptcy chalked it up to errors stemming from sloppy bookkeeping as the firm fought to remain solvent during its tumultuous final days.

But the investigators currently looking at MF Global's messy implosion, specifically the disappearance of as much as $1.2 billion in client money, are now coming to a far different conclusion: that people at the firm likely violated securities laws in the handling of these customer accounts, and that those violations could ultimately turn out to be criminal in nature, the FOX Business Network has learned.

That sentiment is strongest among investigators at the Chicago Mercantile Exchange, which provides front-line regulation of the firms involved in the futures market like MF Global, according to people with direct knowledge of the matter. The CME is one of several agencies including the U.S. Attorney's office, the Commodity Futures Trading Commission and the FBI investigating the missing money, and whether the firm used money from customer accounts to finance the operations in the final days of MF Global’s existence.

The U.S. Attorney's office had no comment.

People at the CME including its chief executive, Craig Donohue, believe at the very least violations of civil securities law likely took place during the final days of MF Global's existence when customers began yanking funds from the firm, lenders pulled lines of credit and MF Global was in a mad rush to find cash. 

CME investigators are finding what they believe is mounting evidence that in those final days, executives at MF Global purposefully co-mingled client funds, which under law are supposed to remain separate from money needed to fund a firm's operation, these people say.

A spokeswoman at the CME would not deny the matter. MF Global’s attorney Marc Kasowitz didn’t return a call for comment.

People close to the investigation say no final decision has been made about possible charges stemming from the MF Global collapse, and one won’t be made for some time. CME, for its part, can only impose civil regulatory charges on member firms, such as MF Global.

But one person with direct knowledge of the matter says federal prosecutors are conducting what he termed as a “very serious” criminal probe of the missing customer money based on a growing body of evidence that suggests people inside the firm likely knew they were misusing customer funds, the likely cause of the missing money.

MF Global’s bankruptcy trustee says the missing money could total $1.2 billion, after initial estimates pegged the amount of missing money at around $600 million. It’s unclear if the trustee will be able to return any of the missing cash to customers. If the customer money was used to pay off trading losses, that money may never be recovered.

In any securities fraud case, proving so-called intent is paramount -- and no easy task. Investigators must show the target intended to violate laws and regulations. In criminal cases, investigators must show an even higher level of intent than in civil cases.

People close to the investigation suspect that lawyers for key executives at MF Global, including former CEO Jon Corzine, will either argue that they were unaware of the co-mingling of the client money, or didn’t intend to commit a crime. While client money must be kept separate from funds used to operate any securities firm, there are loopholes in the law that allow firms to utilize some client funds on a short-term basis.

That said, the growing sentiment among investigators looking at the issue clearly turns up the heat on senior MF Global executives, including Corzine, who was recently asked to appear before a US House of Representatives Subcommittee investigating MF Global’s demise.

Corzine has not told the subcommittee whether he will attend; a person close to the subcommittee says it may subpoena Corzine if he doesn’t appear voluntarily.

Corzine’s attorney didn’t return a call and email for comment.

Charles Gasparino joined FOX Business Network (FBN) in February 2010 as Senior Correspondent.