Bloomberg News

MF Global Independent Counsel Sought by Republican Lawmaker

May 03, 2012

A U.S. House Republican lawmaker has asked colleagues to support his request that the Department of Justice appoint an independent counsel to investigate the failure of MF Global Holdings Ltd. (MFGLQ:US)

Representative Michael Grimm of New York circulated a draft letter yesterday asking Attorney General Eric Holder to appoint the counsel to “take over the investigation into possible wrongdoing surrounding the collapse of MF Global,” according to the letter.

Grimm’s letter, which has not been sent to the Justice Department, cites potential conflicts between the firm’s former Chief Executive Officer Jon S. Corzine, the former Democratic senator and governor from New Jersey, and his relationships with government officials like Gary Gensler, the chairman of the Commodity Futures Trading Commission, as well as his past fundraising for President Barack Obama’s campaign. Gensler, who has recused himself from his agency’s investigation into the firm, worked with Corzine at Goldman Sachs Group Inc. (GS:US)

“There’s too many things that have gone on that lead to an inference of impropriety and for that reason a special prosecutor is warranted,” Grimm said today in an interview on CNBC. The letter states that the lawmaker has “no direct evidence” that the Department of Justice is providing special treatment in the case.

Eighth-Largest Bankruptcy

MF Global filed the eighth-largest U.S. bankruptcy on Oct. 31 after getting margin calls and bank demands for money at its brokerage unit, MF Global Inc.

U.S. lawmakers, the Department of Justice and federal regulators are probing the collapse of the firm and the role of Corzine. Four congressional panels have held hearings on the bankruptcy of the firm that has left a customer funds shortfall estimated at $1.6 billion.

“An independent counsel would be in the best interest of getting customers justice,” James Koutoulas, chief executive officer of Typhon Capital Management and counsel for the firm’s former brokerage customers, said in a telephone interview today.

The letter was first reported by Fox Business News.

To contact the reporters on this story: Phil Mattingly in Washington at; Silla Brush in Washington at

To contact the editor responsible for this story: Maura Reynolds at

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