* Prosecutors met with former CEO Jon Corzine-sources
* Criminal case still appears unlikely
* Move paves way for civil cases
By Aruna Viswanatha and Alexandra Alper
WASHINGTON, Sept 12 (Reuters) - Prosecutors investigating the collapse of failed commodities brokerage MF Global are close to wrapping up their criminal probe and are unlikely to file criminal charges, a move that could pave the way for regulators to bring civil cases, according to people familiar with the investigation.
As expected, prosecutors met with former MF Global chief executive Jon Corzine in the past week but gained little new information, people said, suggesting a criminal inquiry is drawing to a close.
While criminal charges are appearing increasingly unlikely, the expected civil cases have not yet been filed.
The Commodity Futures Trading Commission has held off on a regulatory inquiry while the Justice Department conducted a criminal investigation, sources said.
The movement comes nearly one year after MF Global's collapse caused by investors abandoning it following revelations of heavy bets it made on European sovereign debt.
An estimated $1.6 billion disappeared from customer accounts when the company filed for bankruptcy on Oct. 31, 2011, as employees allegedly improperly mixed client funds with the firm's own money.
Ever since the firm's collapse there has been pressure on federal authorities to file charges in the case against top executives including Corzine, the former New Jersey Governor and U.S. Senator, given the amount of customer money lost.
With a criminal case becoming more unlikely, the pressure to do so will now move to the CFTC, as one of the company's primary regulators.
It is not uncommon for a regulatory agency to hold off on bringing charges while a criminal investigation is underway. Often if prosecutors are involved, they "don't want the civil enforcement agencies mucking around" said Daniel Waldman, a former general counsel of the CFTC who is now in private practice at Arnold & Porter. "That is pretty standard."
Representatives of the U.S. Attorney's office in Manhattan and the CFTC declined comment. A lawyer for Corzine did not respond to requests for comment.
A key remaining question in the criminal inquiry is whether MF Global assistant treasurer Edith O'Brien, who is a central figure in approving the fund transfers that ultimately led to the shortfall, will receive immunity from prosecution.
O'Brien, who invoked her fifth amendment right against self incrimination and refused to speak to Congress about her role at the firm, has not yet spoken to investigators about her role in the firm's final days.
Corzine and other executives face civil claims from a bankruptcy trustee, customers and shareholders, who have accused them of mismanaging the firm and catalyzing its demise.
A June report from the trustee liquidating the company's broker-dealer unit found that Corzine failed to address the firm's growing liquidity needs as he tried to build the commodities broker into a global investment powerhouse.
In a separate filing last week, the trustee, James Giddens, said defendants' insurance money was dwindling, which could impact how much the trustee, customers and shareholders might recover from lawsuits against the executives.
But such funding is unlikely to impact any CFTC case, experts said, since regulators often seek punishment for misconduct, including fines that individuals must pay from their own pockets.
Our 2024 Coverage Needs You
It's Another Trump-Biden Showdown — And We Need Your Help
The Future Of Democracy Is At Stake
Our 2024 Coverage Needs You
Your Loyalty Means The World To Us
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
The 2024 election is heating up, and women's rights, health care, voting rights, and the very future of democracy are all at stake. Donald Trump will face Joe Biden in the most consequential vote of our time. And HuffPost will be there, covering every twist and turn. America's future hangs in the balance. Would you consider contributing to support our journalism and keep it free for all during this critical season?
HuffPost believes news should be accessible to everyone, regardless of their ability to pay for it. We rely on readers like you to help fund our work. Any contribution you can make — even as little as $2 — goes directly toward supporting the impactful journalism that we will continue to produce this year. Thank you for being part of our story.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
It's official: Donald Trump will face Joe Biden this fall in the presidential election. As we face the most consequential presidential election of our time, HuffPost is committed to bringing you up-to-date, accurate news about the 2024 race. While other outlets have retreated behind paywalls, you can trust our news will stay free.
But we can't do it without your help. Reader funding is one of the key ways we support our newsroom. Would you consider making a donation to help fund our news during this critical time? Your contributions are vital to supporting a free press.
Contribute as little as $2 to keep our journalism free and accessible to all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. Would you consider becoming a regular HuffPost contributor?
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. If circumstances have changed since you last contributed, we hope you'll consider contributing to HuffPost once more.
Support HuffPostAlready contributed? Log in to hide these messages.