MF Global Inc. made the headlines after filing for Chapter 11 protection at the end of October, in the biggest collapse of a financial firm since that of Lehman Brothers in 2008.
On November 1, 2011, it was reported that the FBI is investigating the firm for possible diversion of customer funds. MF Global has not been a stranger to controversy over the past few years primarily due to its employees' actions. In May 2011, it was reported that the Dutch financial authority had imposed administrative fines on MF Global UK Limited and one of its employees for violation of the prohibition on market manipulation, through the employee, who reportedly disseminated false and misleading information about a contemplated rights issue. This followed a fine of GBP 500,000 levied by the UK Financial Services Authority on a senior equity analyst at MF Global UK Limited for misleading information in April 2011.
The economic down turn has led to an increase in the pace and scope of financial regulation across the globe. Even one "rogue" employee can potentially cost a firm its reputation and credibility, and with that its access to credit. Training and supervision of employees should therefore be a key consideration for firms. Our cross border financial services team in across the U.S., Europe, and Asia are well placed to assist by providing you with up to date information on the changing regulatory environment across a variety of jurisdictions.