Just announced: there will be an audit of every futures trading firm in the U.S. [via DealBook]
It’s not a surprising move, considering both the Commodity Futures Trading Commission and CME Group — which share regulatory oversight of MF Global — have come under heavy fire and criticism from the industry for failing to properly monitor MF Global’s operations.
After MF Global declared bankrtupcy last Monday, it was discovered that there was money missing from segreagated customer accounts — a violation of the pinnacle rule of Wall Street firms; that company money must stay separate from the clients.
No word yet on if this will actually throw water on the fire, as the $600 million of client funds is still missing and customer accounts remain frozen — affecting a range of individuals such as hedge funders and farmers.
The CFTC will be in charge of auditing larger brokerages. While CME Group, which runs exchanges like Chicago Mercantile Exchange and New York Mercantile Exchange, will take care of smaller companies.
The CFTC also announced that its investigation of MF Global has become official, with CFTC senior commissioner Jill Sommers leading. More of a formality, as the CFTC has been looking into this since the bankruptcy.