In 1969, CME Group Inc. (NASDAQ: CME) established a trust fund to help investors who were hurt when a brokerage failed. Over the years, CME has used the trust to fund its charitable giving programs since 2005 because the chances of a failure seemed so remote.
Enter MF Global. According to a report from Reuters, CME returned the trust to its original purpose when the failure of MF Global brought with it the revelation that customer the brokerage had withdrawn funds from customer accounts and added them to the firm’s own accounts before losing the money altogether.
CME will now use the entire $50 million currently in the trust fund to reimburse MF Global customers whose money was lost. The trust plans to honor all commitments it has made for charitable giving beyond the $50 million fund.
The CME funds will be paid to MF Global’s former customers once the bankruptcy trustee determines that their money is well and truly gone. CME’s executive chairman has estimated the amount of missing funds at $700-$900 million.
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