Criminal charges are likely involving MF Global, the bankrupt broker-dealer that went bust due to bets it made on European debt, Commodity Futures Trading Commission head Bart Chilton told CNBC.
Citing a belief that the company acted "potentially nefarious, potentially illegally," Chilton said in an interview that, "We're going to go after it."
"The books are a mess," he said. "Job one for us is to not only find the money but get that money back to customers and to prosecute to the fullest extent of the law anybody who is involved in any illegal activity."
MF Global filed for bankruptcy on Oct. 31 after reporting a shortfall in customer funding believed to be at least $600 million.
Congress has begun investigating the circumstances behind the company's decline and could call CEO Jon Corzine — the former New Jersey governor and senator — to Capitol Hill for questioning on what went wrong.
Chilton said a number of regulatory failures helped cause the problems, and he's hoping a hearing later today begins to address some of those issues. In particular, he is concerned with making sure customer money does not get commingled with the investment bets the company makes.
"For us, the driving force has to be that we know where the money is. That's why I suggested that we need to do these regular and robust deep data dives, to insure that the money is there below just them telling that it's there on the balance sheet," he said. "We need to go to the accounts and make sure the money is actually there."
An insurance system in the futures industry along the lines of what the Federal Deposit Insurance Corp provides for bank deposits would help protect investors' money from misuse, Chilton added.
"The money's not where it's supposed to be in general," he said. "If it was we would have found it. We're not going to just lift the couch cushion and find $600-plus million."