02/29/2012 10:48 am ET

MF Global May Escape Criminal Prosecution

It looks like MF Global might just get away with it. That's because prosecutors are having trouble figuring out what exactly "it" is.

Even as a Chicago grand jury has begun to probe MF Global, it seems increasingly unlikely that federal authorities will bring a criminal case against anyone involved in the firm’s fall, according to the New York Times.

The company lost more than $1 billion in customer funds as it collapsed. Yet investigators are having trouble finding evidence in thousands of documents that MF Global workers intentionally misused the customer money, instead the huge loss was the result of a chaotic environment and a lack of risk control, the NYT reports, citing people close to the investigation.

The company's former CEO Jon Corzine, who resigned after the collapse, shocked those watching the case when he told Congress in December: "I simply do not know where the money is" in reference to the missing customer funds. A variety of clients, including, as the WSJ reported, farmers across the country, were squeezed after the money they invested with MF Global was suddenly gone.

MF Global is just one of many firms that may escape criminal prosecution despite causing customers to lose big. Government officials haven't successfully prosecuted a single big executive or major Wall Street firm for their involvement in the 2008 financial crisis. In addition, federal prosecution of financial fraud fell to a 20-year low in 2011, according to a November report from a watchdog group.

Though they've seemingly changed their tune, authorities were eager to prosecute MF Global, shortly after it collapsed in October thanks in large part to risky bets on European debt. FBI officials said in November that the agency was interested in probing allegations that the company didn't protect customer funds by keeping them separate from the company’s own money. In addition, federal prosecutors in Chicago and Manhattan initially rushed to make a claim, according to the NYT.

While authorities may be wary of prosecuting MF Global, some regulators have taken steps in an aim to ensure something similar doesn’t happen again. The Commodity Futures Trading Commission passed a rule in December restricting how firms can use customers' money. But not everyone is on board. The Chairman of the CME Group, which had overseen MF Global in the lead up to its collapse, claimed earlier this month that its self-regulation system worked "flawlessly."