Senator Richard Shelby said MF Global customers are waiting for their money to be returned while a "bewildered" CFTC searches for the funds.

"The victims of MF Global, I believe, deserve better," Shelby said.

Shelby made his comments at a Senate Banking Committee hearing on the implementation of the 2010 Dodd-Frank financial oversight law. CFTC Chairman Gary Gensler is testifying at the hearing.

Gensler said in early November that he was not participating in the investigation of futures brokerage MF Global so he would not become a distraction or risk creating an appearance of a conflict of interest.

Gensler and Jon Corzine, who resigned as MF Global's chief executive early last month, worked at Goldman Sachs at the same time and held prominent positions. They both left the investment bank in the late 1990s.

"Holding the CFTC accountable for its regulatory failures, however, will not be an easy task," Shelby said. "Already Chairman Gensler has been evading questions about his role in the regulation of MF Global."

Shelby has requested that the CFTC's inspector general look into the agency's oversight of MF Global including Gensler's decision to recuse himself from the investigation.

MF Global collapsed in October after it was forced to reveal that it had made a $6.3 billion bet on European sovereign debt.

Before the collapse, MF Global had nearly a half dozen regulators policing various parts of the firm, including the CFTC, the Securities and Exchange Commission and industry watchdogs such as the Chicago Mercantile Exchange . But no single regulator was responsible for the whole company.

Investigators have been scouring the company's books, described as messy and unorganized. The customer fund shortfall has been estimated at up to $1.2 billion by the trustee liquidating the company.

Also at the hearing, Senate Banking Committee Chairman Tim Johnson urged regulators to pick up the pace and finish major rules required by Dodd-Frank.

Those rules include new powers to oversee the largest financial companies, restrictions for packaging loans into securities, and a ban on banks making trades with their own money, or proprietary trading.

"While our economy is starting to show signs of recovery from the financial crisis, the ongoing turmoil in Europe is a stark reminder that we must continue to monitor threats to financial stability," Johnson said. "Until the new rules are implemented, our financial system and our economy remain vulnerable to these threats."