Wednesday, 29 July 2015
Last updated 11 hours ago
Nov 22 2011 | 10:01am ET
MF Global Holdings may have come up even shorter than was first believed—the trustee liquidating the company said Monday the shortfall of commodity customer funds could be $1.2 billion, twice the initial estimate.
The firm, formerly managed by Jon Corzine (who also once managed New Jersey, as that state’s governor) filed for bankruptcy on October 31, at which point $600 million in client assets were reportedly missing.
Trustee James Giddens said the amount MF Global should have segregated for customers was short by “$1.2 billion or more,” according to Reuters. Giddens has control of about $1.6 billion of the brokerage's funds and plans to pay back 60% of customer funds by early December.
Giddens earlier transferred over $2 billion to other brokers, giving most customers access to a portion of their funds. If the trustee runs out of funds, he may try to recover MF Global monies tied up elsewhere, Giddens spokesman Kent Jarrell told Reuters.
"We can't distribute money we don't have, but we do have legal means for going after other assets," said Jarrell.
Regulators are looking into what happened to the money and whether MF Global may have illegally mingled customer money with its own.
MF Global spun off from Man in 2007. Corzine, a former Goldman Sachs chairman, took the helm early last year, just months after losing his bid for reelection as New Jersey's governor. Corzine sought to transform MF Global from a futures brokerage into a full-service investment bank with a proprietary trading arm. But some of those proprietary trades, those in European sovereign debt championed by Corzine, have brought MF Global low.
May 27 2015 | 2:15pm ET
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