To conceal mounting trading losses from its clients, the Cayman Islands-based hedge fund created a hidden account at MF Global, to which investors had no access, while simultaneously offering upbeat estimates of its profitability, the CFTC said. The hedge fund ended up losing $133 million in its MF Global accounts, and its bankruptcy receiver settled with MF Global for $75 million in 2007. The CFTC added its own $2 million penalty and cautioned the brokerage that the commission and the courts consider failures of supervision and recordkeeping to be serious offenses that will have dramatic consequences. A person familiar with MF Global says the brokerage's oversight of clients' accounts has become more robust over the years. ROGUE TRADER TRACK RECORD This wasn't the only time federal regulators censured MF Global for alleged lapses in oversight.