The chairman of the U.S. derivatives regulator made a questionable call when he chose to distance himself from probing the demise of futures broker MF Global, the agency's internal watchdog said in a report released on Tuesday, Reuters reported yesterday. The findings by the inspector general of the Commodity Futures Trading Commission, Roy Lavik, were part of a broader report into whether the agency made any missteps into how it regulated MF Global. The report questioned whether it was proper for CFTC chairman Gary Gensler to recuse himself from handling MF Global, which collapsed in 2011, after he played a prominent role leading up to its bankruptcy. MF Global quickly sought Chapter 11 protection on October 31, 2011, after experiencing several frantic days of shuffling around money and seeking a buyer as bets the firm had made on European sovereign debt went sour. Gensler decided to distance himself from the brokerage only after its collapse, and after Republican Senator Charles Grassley (R-Iowa) publicly raised concerns over his prior business relationship with MF Global Chief Executive Jon Corzine. The two had worked at Goldman Sachs at the same time, but the mere fact that they knew each other was no reason for Gensler to recuse himself, the report said.
