A federal agency probing the collapse of MF Global, the brokerage firm formerly headed by Democratic politician Jon S. Corzine, said Thursday that a Republican commissioner will head its work on the case.
The brokerage firm is being liquidated under the supervision of a bankruptcy court, and the Commodity Futures Trading Commission is trying to determine what happened to hundreds of millions of dollars missing from customers’ accounts.
Jill E. Sommers, a Republican commission member, “will be acting as the senior Commissioner for the agency” in the MF Global matter, a CFTC statement said.
The agency usually refrains from discussing ongoing investigations, but in this case it took the extraordinary step of confirming that it has authorized its enforcement division to issue subpoenas.
So far, about 20 subpoenas have been issued, a person familiar with the matter said, speaking on the condition of anonymity to discuss details of the investigation.
Estimates have fluctuated, but about $600 million of customer money remains unaccounted for, CFTC Commissioner Bart Chilton said in an interview Thursday.
“I believe that it’s possible, and some I think would say it’s probable, that something untoward happened with these funds . . . that something either nefarious or illegal has happened,” Chilton said.
“We’re sort of moving from a lost-and-found inquiry to a massive hide-and-seek ploy,” he said.
When regulators pushed it into bankruptcy, MF Global was reeling from disastrous bets on European government bonds. Its collapse showed how the debt crisis in Europe can have wider effects.
In light of Gensler’s past associations with Corzine, Sen. Charles E. Grassley (R-Iowa) and others had questioned Gensler’s ability to perform his oversight role objectively.
On Saturday, an official with knowledge of the situation said Gensler has withdrawn from the matter. “He has taken himself out of any further involvement with the situation related to MF Global in order to protect the career civil servants in our agency and to give everyone the confidence that there is no influence on this matter other than discovering what happened at MF Global,” said the official, who was not authorized to speak for the record.
At a Senate hearing last week, Gensler raised the subject of MF Global and said the CFTC “intends to take all appropriate action . . . to ensure that customers maximize the recovery of funds and, I say, to discover the reason for the shortfall.”
Before being named chairman for the CFTC by President Obama, Gensler was a top official in the Treasury Department in the Clinton administration. He also was a Senate aide when Corzine was a U.S. senator from New Jersey, and both of them worked on legislation responding to the Enron scandal.