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Net Net: Promoting innovation and managing change

MF Global's Corzine Met with CFTC in Protest of Repurchase Rule

Ten months before MF Global declared bankruptcy, Chairman and CEO Jon Corzine met with Commodities Futures Trading Commissioner Bart Chilton on two occasions, CNBC has learned.

Corzine met with Chilton to argue against the Commission's proposed rule that would prohibit companies from allowing internal repurchase agreements. Corzine met twice in person with Chilton and once on the phone.

"Corzine was one of many financial CEOs who commented on the proposed rule, telling me the CFTC didn't understand the impact of the rule and it would be a big mistake for the CFTC to pass it because it would impact the way they do business," Chilton said.

Corzine met with Chilton in December of 2010 and by phone over the Summer in July. The disgraced former CEO also met with CFTC Chairman Gary Gensler. The General Counsel of MF Global and Newedge USA also submitted a comment letter suggesting the CFTC to scrap the proposed rule:

"In our view, this proposal will unnecessarily restrict a very liquid and secure investmcnt that has provided important flexibility as well as reasonable returns for FCMs and their customers. We believe the CFTC should focus on the critical fact that the customer segregated account and the secured amount will be fully collateralized with qualified Rule 1.25 products at all times, even in the event of a counterparty default on a reverse repurchase agreement."

A total of 67 comment letters were received into the CFTC but not all were in favor of not passing the rule.

"I think he (Corzine) thought we were considering of reopening the comment period so they (MF) could come back in and make their case against the rule," said Chilton. "We never did reopen the comment period, but we also didn't pass the rule. In retrospect I wish we did pass it."

Chilton said the CFTC is expected to vote on this rule on December fifth.

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A Senior Talent Producer at CNBC, and author of "Thriving in the New Economy:Lessons from Today's Top Business Minds."