Looking Ahead
The Commission anticipates continuing performance challenges as its FY 2012 appropriation is significantly below the requested budget, as illustrated in the "CFTC Budget" table above. The CFTC, therefore, remains severely inhibited in its ability to acquire the staff and technology necessary to fulfill the Commission's post Dodd-Frank mission and make substantial performance gains. In light of ongoing resource constraints, Commission staff is reviewing its performance targets to determine if adjustments are warranted.
In addition to budgetary constraints, another significant factor that is straining staff resources in FY 2012 is the ongoing bankruptcy proceedings and investigation of MF Global, Inc. (MF Global). On Monday, October 31, 2011, MF Global reported to the Commission a "material shortfall" of hundreds of millions of dollars in segregated customer funds. Earlier that same day MF Global filed for Chapter 7 bankruptcy.
The CFTC's focus with respect to MF Global is two-fold: 1) returning as much money as possible to MF Global customers and determining what went wrong with segregated funds and 2) pursuing the investigation, identifying possible violations of the Commodity Exchange Act or Commission Regulations and taking appropriate action.1 Dozens of staff members (including auditors, attorneys, and investigators) in New York, Chicago, and Washington, D.C. are committed to these actions. The information the Commission learns during this work may be relevant to the Commission as it considers appropriate policy responses or regulatory changes. Commission staff is coordinating its MF Global investigation with other regulators both domestically and overseas, and is working closely with the SIPA Trustee to provide whatever support he needs to resolve issues with commodity customer accounts.
1 On November 8, 2011, Chairman Gensler signed a statement of non-participation in enforcement and various other matters involving MF Global. On November 9, 2011, the Commission voted to designate Commissioner Jill Sommers the Senior Commissioner with respect to the MF Global investigation, pending bankruptcy cases, and other actions to locate or recover customer funds or determine the reasons for shortfalls in customer accounts. The information in this paragraph is summarized by Commission staff based upon Commissioner Sommers' testimony on December 8, 2011, before the U.S. House of Representatives, Committee on Agriculture, Washington, DC. The statements regarding MF Global contained in this paragraph were prepared by Commission staff; Chairman Gensler did not participate in the drafting or review of any statement regarding MF Global. (back to text)