When MF Global was on the brink of collapse, chaos and confusion spread not only among the firm’s executives in New York, but also among its regulators in Washington, according to a report released on Thursday.
In the final hectic hours before the brokerage firm’s bankruptcy more than a year ago, regulators at the Commodity Futures Trading Commission instructed MF Global to transfer $220m to plug a hole in customer accounts. The firm agreed — over the objections of the Securities and Exchange Commission and other regulators.
The New York Times reports that upon learning of the futures commission’s orders, the chairwoman of the S.E.C., Mary Schapiro, responded in an e-mail to a colleague: 'Without telling us ? That is unacceptable'.
The e-mails of regulators, cited in an 'autopsy' report from Republican members of the House Financial Services Committee’s oversight panel, portray a 'disorganized and haphazard' approach to oversight from an alphabet soup of federal agencies. The regulators, the Republicans said, struggled to communicate even as MF Global was reeling.
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