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Economy
In reply to the discussion: STOCK MARKET WATCH -- Wednesday, 4 April 2012 [View all]Demeter
(85,373 posts)12. Clients Raise Questions About MF Global Checks
http://dealbook.nytimes.com/2012/04/01/clients-raise-questions-about-mf-global-checks/?ref=business
MF Global customers who closed their accounts in the brokerage firms final days have been fuming for months about how the firm mailed checks to them, instead of promptly transferring the money electronically as usual. Many of those checks arrived after the bankruptcy filing, and subsequently bounced.
Now customers are taking action, trying to show that MF Global delayed the return of their money to cover the firms own bills and stay afloat. They are amassing client documents and submitting them to federal investigators in hopes of building a criminal case against MF Global executives.
While clients of MF Global say that it was unprecedented for the firm to abandon a longstanding business practice to wire money to customers who were closing accounts, the documents are not definite proof of wrongdoing. In recent weeks, federal authorities have come to suspect that MF Globals actions amount to sloppy record-keeping, rather than criminal fraud....If prosecutors file criminal charges, customers will have a better chance of getting their money back from the banks and other financial firms that currently have the funds. Under the law, the trustee working on behalf of customers has more leverage to recover the funds in the event of fraud....MORE
MF Global customers who closed their accounts in the brokerage firms final days have been fuming for months about how the firm mailed checks to them, instead of promptly transferring the money electronically as usual. Many of those checks arrived after the bankruptcy filing, and subsequently bounced.
Now customers are taking action, trying to show that MF Global delayed the return of their money to cover the firms own bills and stay afloat. They are amassing client documents and submitting them to federal investigators in hopes of building a criminal case against MF Global executives.
While clients of MF Global say that it was unprecedented for the firm to abandon a longstanding business practice to wire money to customers who were closing accounts, the documents are not definite proof of wrongdoing. In recent weeks, federal authorities have come to suspect that MF Globals actions amount to sloppy record-keeping, rather than criminal fraud....If prosecutors file criminal charges, customers will have a better chance of getting their money back from the banks and other financial firms that currently have the funds. Under the law, the trustee working on behalf of customers has more leverage to recover the funds in the event of fraud....MORE
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