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Reply #10: U.S. Bank Funds Won’t Cover MF Global Shortfall, Trustee Says [View All]

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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:01 AM
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10. U.S. Bank Funds Won’t Cover MF Global Shortfall, Trustee Says
http://sfgate.bloomberg.com/SFChronicle/Story?docId=137...

Dec. 1 (Bloomberg) -- MF Global Inc., the futures brokerage that collapsed on Oct. 31, will have a shortfall in customer funds even if all the money in customer accounts at U.S. depository institutions is recovered, the trustee overseeing the firm’s bankruptcy said.

James W. Giddens, the trustee, has said there may be as much as $1.2 billion in missing funds. MF Global Inc. was a subsidiary of MF Global Holdings Ltd., the New York-based firm run by Jon S. Corzine that failed after making $6.3 billion in wrong-way bets on European sovereign debt.

“The trustee has determined that even if he could recover everything that is at U.S. depositories, there will be a shortfall in what MF Global management should have segregated at U.S. depositories,” according to a document, dated today, from Giddens’s office that was obtained by Bloomberg News. Kent Jarrell, a spokesman for the trustee, confirmed the authenticity of the document, and said it was part of a briefing Giddens gave today in Washington with congressional aides and a lawmaker.

The Commodity Futures Trading Commission, Securities and Exchange Commission, Justice Department and trustee’s office are investigating the missing client funds.
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