Contact Us
Make My Homepage

MF Global Trustee Says $1.2B or More Missing

MF Global
Mario Tama, Getty Images

The court-appointed trustee overseeing MF Global’s bankruptcy says up to $1.2 billion is missing from customer accounts, double what the firm had reported to regulators  last month.

The trustee, James Giddens, also said in a statement Monday that his plans to release about $520 million from accounts that have been frozen will mean nearly all the assets under his control will be distributed.

Giddens has been combing through the accounts and finances of MF Global, which filed for bankruptcy protection on Oct. 31. Regulators are investigating whether MF Global tapped money from clients’ accounts as its own financial condition worsened. That would be a violation of securities rules. The FBI is investigating whether New York-based MF Global violated any criminal laws.

MF Global was led by former New Jersey Gov. Jon Corzine. The firm collapsed after making a disastrous bet on European debt. Giddens’s office said in a statement that “the apparent shortfall” was as much as $1.2 billion or more, but noted that the figure could change.

Last week, the judge overseeing the bankruptcy proceeding approved Giddens’s request that 60 percent of the funds in about 23,300 frozen cash-only accounts be returned to customers. The money could start moving to customers before Thanksgiving, a spokesman for Giddens said.

Giddens has previously returned to customers $1.5 billion in collateral for their trading accounts with MF Global. He has a goal of eventually returning 100 percent of all funds to customers, though that could be reduced by the apparent shortfall.

Customers use the accounts for trading derivatives. The value of derivatives is based on the value of an underlying asset, such as interest rates, oil prices or currency rates. MF Global was one of the biggest players in the derivatives market.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

Best of NJ 101.5

Recommended For You

Best of the Web

Leave a Comment

It appears that you already have an account created within our VIP network of sites on . To keep your personal information safe, we need to verify that it's really you. To activate your account, please confirm your password. When you have confirmed your password, you will be able to log in through Facebook on both sites.

Forgot your password?

*Please note that your prizes and activities will not be shared between programs within our VIP network.

It appears that you already have an account on this site associated with . To connect your existing account just click on the account activation button below. You will maintain your existing VIP profile. After you do this, you will be able to always log in to using your original account information.

*Please note that your prizes and activities will not be shared between programs within our VIP network.

Please fill out the information below to help us provide you a better experience.

(Forgot your password?)

Not a member? Sign up here

Sign up for New Jersey Insiders quickly by connecting your Facebook account. It's just as secure and no password to remember!

Sign up to have exclusive New Jersey Insiders contests, events, coupons, presales, and much more delivered to you for FREE.