CME Group Inc, the main exchange regulator of bankrupt brokerage MF Global Holdings Ltd, said it appears that any transfer by the broker of its customer segregated funds happened after a CME audit last week, and may have been designed to avoid detection.
``With respect to the apparent shortfall in customer segregated funds held by MF Global ... it appears that any transfer of such funds occurred following the completion of CME audit procedures respecting such funds and in violation of CFTC Regulations and CME rules,'' CME said Wednesday.
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``It now appears that the firm made subsequent transfers of customer-segregated funds in a manner that may have been designed to avoid detection,'' the exchange said.
MF Global ``did not disclose or report such transfers to the CFTC or CME until early morning on Monday, October 31, 2011,'' CME added in the e-mailed statement.
MF Global filed for bankruptcy Monday morning. On Tuesday, CME said MF Global failed to segregate the funds, a violation of a key futures brokerage rule.
CME said Wednesday that last week's review indicated that MF Global was in compliance with a requirement for the broker to segregate customer funds from its own funds. (Reporting by Jonathan Spicer)