CME Group Inc, which has given $22 million to Chicago-area schools and charities over the past five years, has stopped making grants through its main foundation, citing the collapse of MF Global Holdings Inc.
Investigators are still searching for hundreds of millions of dollars of customer funds that CME says were improperly siphoned off Pin the brokerage's final days to plug its escalating liquidity needs.
Last month, the exchange operator said it would give former MF Global customers the entire $50 million held by CME Trust, which was originally designed to help traders caught out by a broker default but that in recent years has been a mainstay of the CME's charitable giving.
"CME Group will continue to honour some previous Trust commitments going forward - even after the $50 million is paid out," CME spokeswoman Laurie Bischel said. "Though the CME Trust will be used to help customers of MF Global, CME Group remains committed to our communities and will continue to provide support to charitable organisations as possible through our other programs and corporate foundations."
CME Trust was established in 1969 to provide financial assistance to customers if a brokerage became insolvent.
Federal rules requiring brokers to keep client money separate from their own made the prospect of customers actually losing money in a broker default seem so remote that the CME's board in 2005 voted to turn the Trust into a charitable foundation.
In 2008, after giving millions of dollars to local institutions, the Trust launched CME Group Foundation with a $16 million grant, and pledged to make annual donations to support the Foundation's grant-making. The Foundation has become the exchange operator's biggest charitable giver, doling out more than $6 million last year alone.
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