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CFTC: NY Federal Court orders MF Global to pay $1.2B in restitution, $100M penalty

MF Global sign is seen in the office building where MF Global Holdings Ltd have offices in Manhattan on November 1, 2011 in New York.
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MF Global sign is seen in the office building where MF Global Holdings Ltd have offices in Manhattan on November 1, 2011 in New York.

The New York Federal Court ordered MF Global Holdings to pay $1.21 billion in restitution fees, in addition to a $100 penalty, for its unlawful use of customer funds, the Commodity Futures Trading Commission said Wednesday.

Litigation continues against ex-MF Global chief Jon Corzine and MF Global's former Assistant Treasurer Edith O'Brien, the CFTC said.

MF Global, a subsidiary of MF Global Holdings, collapsed in 2011 at the height of the European debt crisis when markets became spooked by the firm's $6.3 billion bet on European government bonds. U.S. authorities have accused the firm of using customer money to cover liquidity shortfalls.

The CFTC deemed MFGH responsible for MFGI's failure to notify regulators account deficiencies and its unlawful use of customer segregated funds in 2011.

MFGH was also accused of filling false statements in CFTC reports and using customer funds for impermissible investments in securities that were not considered readily marketable or highly liquid.

Reuters contributed to this report.