* 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.