CFTC names Sommers to head MFGI investigation

Jill Sommers, CFTC commissioner
The Commodity Futures Trading Commission today announced that Commissioner Jill Sommers will be acting as the senior commissioner for the agency in matters relating to the bankruptcy of MF Global, Inc. (MFGI) and the shortfall of funds in MFGI’s segregated accounts containing customer property and funds.

The designation is effective immediately, the CFTC said in a news release.

The announcement comes after CFTC Chairman Gary Gensler recused himself from matters relating to MFGI. Gensler worked at Goldman Sachs with former Sen. and Gov. Jon Corzine, D-N.J., who headed MFGI.

The commission also announced that on Oct. 31 its division of enforcement opened an investigation into whether the Commodity Exchange Act or commission regulations were violated in connection with MFGI, and the commission has authorized the division to issue subpoenas.

The commission noted that it normally does not comment on investigations, but determined that it is in the public interest to confirm the existence of this particular investigation.

“Segregation of customer funds is at the core of customer protection in the commodity futures and options markets and must be maintained at all times,” Sommers said in the news release.

“I have complete confidence in the dedicated men and women in Enforcement to carry out the necessary investigation to get to the bottom of what happened at MFGI,” she said

“Aside from the investigation, we will do everything in our power to ensure public confidence in the markets by directing a review of clearing futures commission merchants to determine that segregated funds are being properly maintained in accordance with the CEA and commission regulations.”

Senate Agriculture Committee ranking member Pat Roberts, R-Kan.
Senate Agriculture Committee ranking member Pat Roberts, R-Kan., demanded in a letter today that Gensler clarify the date and scope of his recusal.

Noting that the agriculture committees have jurisdiction over the CFTC, Roberts said, “Now that the CFTC has taken an official action in regards to your involvement moving forward, the public should also be made aware of any action you took prior to your recusal and the appointment of Commissioner Sommers to this new position."

"What role did you play in CFTC’s response to MF Global, Inc.’s bankruptcy before your recusal, including any directives or informal actions that may have occurred?,” Roberts asked.