The feds are joining the probe into how MF Global Holdings, the Wall Street brokerage firm led by former New Jersey Gov. Jon Corzine, allowed hundreds of millions of dollars in clients' money go missing, according to published reports Tuesday.
MF Global cannot account for a large amount of customer money that was supposed to be kept separate from other funds, sources said, and regulators are scrambling to review the broker's accounts.
A source familiar with a separate investigation by regulators told the Associated Press that the company admitted to diverting client money. However, it still was not clear whether the company pilfered client funds or merely cannot account for the money.
The FBI is reportedly looking into the matter, along with federal prosecutors. Both declined comment Tuesday.
The U.S. Securities and Exchange Commission and the Commodities Futures Trading Commission are also investigating.
MF Global, which filed for bankruptcy protection on Monday, is the biggest U.S. casualty ofEurope's debt crisis and the seventh-largest bankruptcy by assets in U.S. history.