Officials from the Department of Justice along with representatives from other government agencies met with Former MF GlobalCEO Jon Corzine last week, according to people familiar with the matter, marking a potentially critical development in the government’s investigation into the failed firm and its subsequent misuse of customer funds.
Officials have been trying to build a case against Corzine and other former MF Global executives since the brokerage firm declared bankruptcy last fall – the fallout of which resulted in massive transactions which improperly siphoned money out of customer accounts.
Roughly 10 months after the firm’s collapse, there remains a $1.6 billion shortfall in these accounts, according to bankruptcy trustee James Giddens. No one at MF Global has been formally charged with any wrongdoing to this point.
Criminal investigators have been slow to build a case against Corzine, and the substance of these new talks may not provide them with any so-called “smoking gun” proof of criminal activity. Corzine has previously given testimony in front of congress that he did not authorize a misuse of customer funds, and his conversations with government investigators last week were similar to his prior public testimony, these people said.
Corzine was not granted criminal immunity for the purposes of these discussions, according to these people. MF Global’s former treasurer Edith O’Brien has refused to give testimony to criminal investigators unless they grant her such immunity.
A spokesperson for Mr. Corzine declined to comment on the matter. Spokespeople for the CFTC and SEC did not immediately respond to requests for comment. Spokespeople at the Department of Justice could not be reached outside of normal business hours.
If the government is unable to build a criminal case, Corzine and other top brass at MF Global could still face fines by both the Securities and Exchange Commission and the Commodities Futures and Trading Commission – both of which are investigating the matter.
Corzine may also be on the hook for financial penalties from class action lawsuits brought by the SIPA trustee. Last week, trustee Giddens received court approval to join a group of plaintiffs suing several former MF Global executives, including Corzine. The trustee has stated publicly that he believes there are legitimate claims and recoveries to be made from these lawsuits.
—By CNBC’s Jesse Bergman.
Follow Jesse on Twitter @JBergmanCNBC