Turf war brews for prosecutors probing MF Global

Wed Dec 7, 2011 5:00pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Grant McCool

NEW YORK (Reuters) - A turf war may be brewing between two high-profile U.S. prosecutors over who will take the lead in a criminal probe of collapsed futures brokerage MF Global Holdings Ltd MFGLQ.PK.

U.S. Attorney Patrick Fitzgerald in Chicago and Preet Bharara, his counterpart in Manhattan, are examining how hundreds of millions of dollars went missing from the futures brokerage, sources familiar with the matter have told Reuters.

No charges have been brought, and no one at MF Global has been accused of wrongdoing.

Fitzgerald and Bharara are hard-charging prosecutors whose careers briefly overlapped in the criminal division of the Manhattan U.S. Attorney's office a decade ago.

Now their paths are crossing again. Along with regulators and the FBI, they are trying to unravel what went wrong at MF Global, a commodities and derivatives company that collapsed into bankruptcy on October 31 after bad bets on European bonds.

The company was run by Jon Corzine, who resigned last month and is expected to appear on Thursday before a congressional panel examining the bankruptcy and the hunt for missing client funds. Corzine is a former head of Goldman Sachs, a former U.S. senator from New Jersey and a one-term governor of the state.

MF Global had operations in New York and Chicago, giving each federal prosecutor's office a basis for an investigation.

Fitzgerald's office has sent subpoenas to parties tied to MF Global, a person familiar with the matter said. Bharara's office has started a investigation and tapped two assistant U.S. attorneys to oversee it, according to another source. These people declined to be identified because the investigations are not public.   Continued...