MF Global order to pay $1.6 billion to former clients

Jon Corzine, former MF Global CEO | Creative Commons image by Center for American Progress

MF Global will repay nearly the entire amount that disappeared from customer accounts during the brokerage firm’s financial meltdown in 2011.

A federal court in New York has ordered the now defunct company to pay $1.2 billion in restitution to former customers, the US Commodity Futures Trading Commission (CFTC) announced on Monday. 

The consent order, entered earlier this month by US District Court Judge Victor Marrero, also imposes a $100 million civil monetary penalty on the firm, to be paid after customers and creditors have received their cuts.

Dragged down by risky investments in European sovereign bonds, among other things, MF Global filed for bankruptcy in October 2011 – but not before removing $1.6 billion from customer accounts in a failed attempt to keep the firm afloat.

Monday’s ruling stems from a complaint filed in June by the US Commodities Futures Trading Commission over the lost funds.

The CFTC will continue with its cases against MF Global execs, including CEO Jon Corzine and former assistant treasurer Edith O’Brien.

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