Federal law enforcement authorities investigating the implosion of MF Global say the likelihood of a criminal prosecution in the case has grown in recent weeks, as investigators actively discuss providing immunity to a key witness who could provide details about who was responsible for the transfer of money out of customer accounts during the brokerage firm's final frantic days.
People with direct knowledge of the investigation say that in recent days federal law enforcement authorities have held high-level discussions about granting immunity from prosecution to former MF Global assistant treasurer Edith O'Brien in exchange for her cooperating in the probe.
Granting immunity from prosecution is rare in criminal cases primarily because prosecutors are wary of giving possible targets free reign to discuss their alleged crimes without fear of facing charges.
In fact until recently, federal prosecutors have brushed off offers of a so-called "proffer" agreement by O'Brien's attorneys in which she would gain immunity in exchange for her cooperation in the ongoing criminal probe, these people say.
But federal authorities investigating the MF Global collapse, specifically the disappearance of $1.6 billion in customer funds, have recently had a change of heart, people with direct knowledge of the matter told FOX Business.
Prosecutors believe O'Brien, as the firm's assistant treasurer and one of the people in charge of MF Global's funding, holds the key to whether senior officials at the firm, including former CEO Jon Corzine, either gave direct orders for the transfer of customer funds to keep the firm alive during its final days, or knew customer funds were being used.
It's unclear if prosecutors will grant O'Brien immunity or when they will make their final decision, but people close to the investigation say they are leaning toward a proffer deal.
Granting O'Brien immunity could pose a major headache for Corzine. Federal criminal authorities in New York and Chicago were starting to conclude that no criminal activity took place regarding the missing money and that the use of customer funds was the result of confusion at a firm.
But now criminal authorities are once again actively weighing criminal charges against senior officials at the firm, including Corzine, based on the prospect of O'Brien's testimony.
Officials from the Justice Department declined to comment; a spokesman for Corzine declined comment. An attorney for O'Brien didn't return calls for comment.
To read more, go to Fox Business
MF Global, immunity from prosecution, MF Global assistant treasurer Edith O'Brien, federal authorities, Jon Corzine, authorities, authorities, customer funds, criminal prosecution, O'Brien, federal law enforcement, direct knowledge, O'Brien immunity