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First on CNBC: CNBC Transcript: CFTC Commissioner Bart Chilton on CNBC's "Street Signs" Today

WHEN: TODAY, THURSDAY, JUNE 27TH

WHERE: CNBC'S "STREET SIGNS"

Following is the unofficial transcript of a first on CNBC interview with CFTC Commissioner Bart Chilton today on CNBC's "Street Signs." Following is the link to the interview on CNBC.com: http://video.cnbc.com/gallery/?play=1&video=3000179100.All references must be sourced to CNBC.

BRIAN SULLIVAN: AND WITH MORE ON THIS BREAKING NEWS FIRST ON CNBC, LET'S BRING IN CFTC COMMISSIONER BART CHILTON WHO RUSHED TO A STUDIO FOR US. BART, WE DO APPRECIATE IT. WHAT CHANGED IN THE LAST FEW HOURS OR DAYS AROUND THE JON CORZINE CASE?

CHILTON: WELL, WE FILED IS THE BIG THING. IT'S BEEN A LONG TIME COMING SINCE OCTOBER OF 2011. ONE OF THE THINGS WE'VE BEEN WORKING ON IS WHETHER OR NOT THERE IS A SETTLEMENT WITH REGARD TO MF GLOBAL, THE FUTURES COMMISSION MERCHANT AND HOPEFULLY WE WILL WORK OUT A DEAL ON THAT BUT THAT IS SUBJECT TO THE COURT OF COURSE. I THINK THE BIGGER STORY HERE FOR ME IS, ENSURING THAT CUSTOMERS KNOW THAT THE GOVERNMENT'S LOOKING OUT FOR THEM. THAT THESE SEGREGATED FUNDS, WHEN YOU PUT YOUR MONEY WITH SOMEBODY THAT THEY CAN'T USE THOSE FOR OTHER PURPOSES. THERE ARE CLEAR LAWS AGAINST THAT. THAT'S WHAT'S BEEN VIOLATED HERE, BRIAN AND MANDY.

MANDY DRURY: I WOULD LIKE TO KNOW THOUGH BECAUSE THE CFTC HAD REGULATORY OVERSIGHT OF MF GLOBAL SO I WOULD LIKE TO KNOW WHAT TOOK THE CFTC SO LONG TO NOTICE THAT THERE WAS A MISUSE OF CLIENT FUNDS?

CHILTON: WELL ONE OF OUR CHARGES, ONE OF THE COUNTS THAT WE HAVE HERE IS THAT WE ALLEGE THAT THEY FALSELY REPORTED, MANDY. WE ARE TALKING HUNDREDS OF MILLIONS OF DOLLARS IN FALSE REPORTING. THEY WERE UNDER SEGGED THAT MEANS THEY DIDN'T HAVE THE MONEY THERE WERE SUPPOSED TO AND THEY TRANSFERRED MONEY AROUND LIKE IT WAS A SHELL GAME. SO YOU KNOW IT'S ONE THING TO SAY REGULATORS SHOULD DO A BETTER JOB AND I'D AGREE. AS YOU KNOW MANY TIMES. BUT WHEN PEOPLE LIE TO US, IT IS A LITTLE DIFFICULT TO GET TO THE TRUTH SOMETIMES.

KATE KELLY: BART, IT'S KATE KELLY HERE FROM CNBC HEADQUARTERS. I'M JUST CURIOUS IF YOU COULD GIVE US A LITTLE BIT OF A FLAVOR OF THE INTERNAL CONVERSATIONS IN THESE FINAL DAYS AT CFTC. I MEAN FOLKS WERE EXPECTING TO SEE THIS SUIT A LITTLE BIT EARLIER IN THE WEEK. I KNOW YOU GUYS GO THROUGH A PROCESS OF EVERYBODY INDIVIDUALLY LOOKING AT A POETENTIAL COMPLAINT TO SEE IF THEY SIGN OFF ON IT. AND IN THIS CASE THERE WERE NOT FIVE COMMISSIONERS INVOLVED, NOT FIVE VOICES BUT FOUR, BECAUSE CHAIRMAN GENSLER RECUSED HIMSELF SO WAS THERE EVER A POINT AT WHICH THERE WAS A 2-2 SPLIT OR SOME UNANIMITY HERE?

CHILTON: WELL, I THINK THERE'S UNAMINITY AMONG THE COMMISSIONERS TO GO FORWARD. AND I AM PLEASE WITH THAT AND I CAN'T GET TOO MUCH INTO THE DETAILS, ALTHOUGH YOU COVERED THE COMPLAINT ITSELF, KATE, VERY WELL. AND SOME OF THE THINGS THAT ARE INTERESTING RECORDED TELEPHONE TRANSCRIPTS I THINK ARE VERY INTERESTING. AND I THINK WHAT WE ALLEGE WILL BE HOPEFULLY PROVED IN COURT. BECAUSE I THINK WE HAVE DONE A GOOD JOB. IT TOOK US A WHILE, YOU'RE ABSOLUTELY RIGHT. BUT WHAT WE HAVE, THE EVIDENCE WE HAVE, AND THINGS WE ARE ALLEGING I THINK WE'RE ON GOOD SOLID GROUND AND I HOPE A JURY WILL AGREE WITH US.

KELLY: BART, IN TERMS OF THE SETTLEMENT ISSUE, THE NEW YORK TIMES HAD SAID THAT IN THIS CASE JON CORZINE WASN'T GIVEN AN OPPORTUNITY TO SETTLE THESE CHARGES BEFOREHAND. IS THAT TRUE?

CHILTON: I REALLY CAN'T GET INTO IT. I'M SORRY KATE. BUT RIGHT NOW WE ARE TRYING TO WORK OUT A SETTLEMENT WITH MF GLOBAL THE FUTURES COMMISSION MERCHANT. BUT AGAIN, SUBJECT TO THE COURTS APPROVAL. THIS IS SOMETHING WE THINK NEEDS TO BE BROUGHT BEFORE A JURY AND THIS SHOULD BE TRANSPARENT THERE SHOULDN'T BE ANYTHING BEHIND CLOSED DOORS HERE. WE WANT IT OUT IN THE OPEN AND A JURY OF MR CORZINE AND MS O'BRIEN'S PEERS CAN MAKE THEIR DETERMINATION.

BRIAN SULLIVAN: LET ME JUMP IN HERE A SECOND KATE BECAUSE I WANT TO ASK BART, WHAT DO YOU KNOW ABOUT JON CORZINE'S FINANCIAL SITUATION. IF YOU FILED A CIVIL LAWSUIT AGAINST HIM HOW MUCH MONEY DO YOU BELIEVE HE WOULD HAVE TO DISGORGE?

CHILTON: I DON'T KNOW ABOUT HIS FINANCIAL SITUATION. MAYBE OTHER PEOPLE DO, BRIAN. BUT I DON'T PERSONALLY KNOW ABOUT IT, SORRY.

KELLY: BART I AM CURIOUS ABOUT THIS SETTLEMENT THAT YOU MENTION IN YOUR PRESS RELEASE, YOU TALK ABOUT THE FACT YOU'VE COME TO TERMS WITH MF GLOBAL OF COURSE OR WHAT IS LEFT OF IT AT THIS POINT AND THERE WOULD BE A HUNDRED PERCENT RESTITUTION OF THE ROUGHLY 100 BILLION LOST BY COMMODITY CUSTOMERS WHEN THE FIRM WENT DOWN. AND YOU TALK ABOUT COURT APPROVAL, WHICH IS ESSENTIAL, RIGHT? WE ARE HAVING A DEBATE RIGHT NOW AS TO WHETHER COURTS ARE GOING TO SIGN OFF ON THESE REGULATORY SETTLEMENTS. WOULD THIS INCLUDE AN ADMISSION OF WRONGDOING OR IS THAT NOT YET CLEAR?

CHILTON: IN GENERAL, WHEN WE DO SETTLEMENTS, KATE, MUCH TO MY CHAGRIN, BY THE WAY, WE DON'T -- THEY DON'T TAKE BLAME. THEY DON'T TAKE RESPONSIBILITY. I WISH THAT CHANGED IN THE FUTURE.I HOPE IT CHANGES IN THE FUTURE. BUT OUR SETTLEMENTS TRADITIONALLY HAVE BEEN,THEY PAY THE MONEY AND THEN PEOPLE CAN MAKE THEIR OWN JUDGMENTS ABOUT WHY THEY PAID THE MONEY.

DRURY: DO YOU THINK CLIENTS ARE SAFER THESE DAYS? DO YOU THINK FROM YOUR EXPERIENCE OF MF GLOBAL AND VARIOUS OTHER SITUATIONS, DO YOU THINK CLIENTS OUT THERE CAN FEEL SAFER AND THERE IS BETTER OVERSIGHT OF WHAT IS GOING ON IN THE INDUSTRY?

CHILTON: ABSOLUTELY. IT IS ONE OF THE AREAS. I MEAN THIS IS ONE OF THE SMALL SILVER LINING IN THIS WHOLE HORRIBLE DEBACLE IS THAT WE HAVE INCREASED OUR CUSTOMER PROTECTION. SO ONE OF THE THINGS THAT MF GLOBAL, WE ALLEGE THEY WERE DOING, IS USING THE MONEY INTRADAY, THEY KEPT THE MONEY THERE DURING THE REPORTING PERIODS BUT WE ALLEGE THAT DURING THE MIDDLE OF THE DAY THEY USED IT TO COVER BAD BETS ON SOVEREIGN DEBT AND SOME OTHER THINGS. SO RIGHT NOW, THEIR MONEY IS REQUIRED TO BE THERE ALL THE TIME. AND WE CAN CHECK ON IT. WE CAN HAVE SPOT CHECKS. IT HAS ALWAYS BEEN REQUIRED TO BE THERE ALL THE TIME, THEY JUST WE ALLEGE USED IT DURING MIDDAY. BUT NOW WE WILL HAVE AUTOMATIC CHECKING THAT WE WILL AUTOMATIC ELECTRONIC ACCESS AND WE DO RIGHT NOW BY THE WAY AND EVERYDAY WE GET A CONFIRMATION ELECTRONICALLY –THE NATIONAL FUTURES ASSOCIATION GETS A CONFIRMATION FOR US.

KELLY: OF WHAT TRADES HAVE OCCURRED?

CHILTON: TO ENSURE THAT THE CUSTOMER'S MONEY IS THERE. TO ENSURE IT HASN'T BEEN TOUCHED. THAT IT IS THERE,IT'S SAFE. SO CUSTOMERS SHOULD FEEL BETTER ABOUT WHAT'S GONE ON, EVEN IF SOME IS A RESULT OF THIS HORRIBLE SITUATION.

KELLY: I UNDERSTAND WE ARE SHORT ON TIME, BUT I WANT TO ASK YOU BRIEFLY ABOUT PRECEDENT SETTING HERE. I KNOW THERE'S BEEN A LOT OF PUBLIC OUTRAGE ABOUT A PERCEIVED DEARTH OF CASES,DEALING WITH WHAT RAN UP TO THE FINANCIAL CRISIS AS WELL AS SITUATIONS IN WHICH CUSTOMERS GOT VERY HURT. HERE IS AN EXAMPLE OF YOU GUYS BEING PRETTY TOUGH ON A WELL KNOWN INDUSTRY FIGURE AND FORMER GOVERNMENT FIGURE FOR NOT SAFEGUARDING CUSTOMER FUNDS. DO YOU FEEL THAT THIS IS NOVEL AND WILL IT SET A PRECEDENT?

CHILTON: WELL, IT SETS A PRECEDENT, KATE, JUST BECAUSE IT IS A BILLION BUCKS. I MEAN IT IS A BILLION DOLLARS OF CUSTOMER MONEY. SO IT IS HUGE IN THAT REGARD. WE DO HAVE OTHER CASES WHERE THERE'S BEEN A CONTROLLING PERSON WHO FAILED TO SUPERVISE AND WE HAVE WON THOSE CASES. IT IS NOT WITHOUT PRECEDENT WE HAVE DONE THIS TYPE OF THING IN THE PAST. BUT IN GENERAL, IT SETS A PRECEDENT BECAUSE THE AMOUNT IS SO MAMMOTH.


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