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Response to Tansy_Gold (Original post)

Tue Apr 24, 2012, 09:09 PM

6. MF Customers Press J.P. Morgan for Funds

 

http://online.wsj.com/article/SB10001424052702303592404577359872845060222.html

Customers of MF Global Holdings Ltd. are pushing regulators to get tougher on J.P. Morgan Chase & Co. about money that went missing from accounts just before the firm's collapse. The move comes as a bankruptcy trustee representing brokerage customers of MF Global has said he is conducting an investigation of J.P. Morgan and had entered "substantive discussions regarding the resolution of claims" against the Wall Street firm.

In a letter set to be sent to regulators and lawmakers on Monday, an MF Global customer group calls for J.P. Morgan to "return hundreds of millions of dollars in MF Global customer funds transferred" to J.P. Morgan in late October. The group, called the Commodity Customer Coalition, urged U.S. officials to "demand" that the New York bank "disgorge all MF Global customer property immediately."

J.P. Morgan is cooperating with the ongoing investigation, has said it did nothing wrong and lost some of its own money in the Oct. 31 bankruptcy because it was a creditor of MF Global.

It isn't clear if settlement talks will result in a payment for customers in coming months or whether trustee James Giddens will decide to sue J.P. Morgan. Mr. Giddens said this month that he might sue former officials and executives of MF Global, led from early 2010 until its bankruptcy-protection filing by Jon S. Corzine, the former Goldman Sachs Group Inc. chairman and governor of New Jersey.

On Tuesday, Mr. Giddens is scheduled to testify in front of a Senate Banking Committee hearing about the lessons from MF Global and how rules could be changed to help prevent a repeat of the problem. Also scheduled to testify are Louis Freeh, the bankruptcy trustee for the parent company, and regulators who helped oversee the brokerage firm that specialized in commodities and derivatives contracts known as futures....The probe into the money missing from customer accounts, estimated by Mr. Giddens at $1.6 billion, is nearing its seventh month. So far, Mr. Giddens has been able to return about 70% of many customers' assets and is pushing to increase that to 80% in coming weeks...MORE

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Tansy_Gold Apr 2012 OP
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