As one of the key agencies probing the recent bankruptcy of MF Global Holdings, the Commodity Futures Trading Commission is now pursuing the closely observed case without input from Chairman Gary Gensler.
The Wall Street Journal noted on Monday that Gensler last week recused himself because of his longtime personal ties to defrocked MF Global chief executive Jon Corzine, the former senator and New Jersey governor with whom Gensler worked when they were younger men at Goldman Sachs Group.
MF Global's demise, allegedly missing client funds and involvement with iffy European investments have raised new concerns about the effectiveness of regulations enacted after the 2008 financial meltdown.
The recusal was recommended by Sen. Chuck Grassley, R-Iowa, who said in a statement on Friday: "MF Global's case is a big collapse that requires a lot of work from the commission to try to figure out what went wrong and minimize further investor losses if possible. It's hard to see how the commission chairman could be completely objective in looking out for wronged investors when he has such strong ties to the principal of the failed firm."