Tags: MF Global

Official: MF Global Admitted Using Client Money

Tuesday, 01 Nov 2011 02:57 PM

WASHINGTON — A federal official says MF Global, the securities firm led by Jon Corzine, admitted to using clients' money as its financial troubles mounted.

An MF Global executive admitted that to federal regulators in a phone call early Monday after regulators discovered money missing from clients' accounts, according to an official familiar with the conversation.

The official spoke on condition of anonymity because he was not authorized to discuss a preliminary investigation by federal regulators.

Government rules require securities firms to keep clients' money and company money in separate accounts. Violating them could result in civil penalties.

MF Global, which filed for bankruptcy protection on Monday, faced a cash crunch following multibillion-dollar bets on European sovereign debt.

Corzine ran Goldman Sachs Group Inc., and later was governor of New Jersey.

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