NEW YORK CITY: Failed brokerage MF Global will pay $1.2 billion in restitution plus a $100 million penalty to resolve charges it took money from customer accounts as it collapsed in 2011, US regulators said Monday.
The Commodities Futures Trading Commission, which sued MF Global and some employees over the October 2011 collapse, said a federal consent order issued on the case would "ensure customers recover their losses sustained when MF Global failed."
The payments arise out of charges that MF Global raided customer accounts for more than $1 billion as the brokerage was collapsing due in part to bad bets on European sovereign debt.
When the CFTC announced the suit in June 2013, it said MF Global agreed to settle and make restitution to clients. On November 8, a federal judge approved the consent order, in which MF Global admitted to misusing client funds.
CFTC suits against former MF Global chief executive Jon Corzine and former assistant treasurer Edith O'Brien are continuing.
"Division staff have worked tirelessly to ensure that 100 percent restitution be awarded to satisfy customer losses," said Gretchen Lowe, acting director of the CFTC's division of enforcement.
"The CFTC will continue to ensure that those who violate US commodity laws and regulations designed to protect customer funds will be vigorously prosecuted."
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