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Trustee for MF Global Says All Missing Customer Money Accounted For
The trustee overseeing the liquidation of MF Global, James Giddens, has told the Senate Banking Committee on Tuesday that he has been able to account for the $1.6 billion of customer money that disappeared after the firm collapsed. Giddens said that his analysis “is substantially concluded” and that his team had been working on tracking down the money ever since the company filed the eighth largest bankruptcy in the country’s history back in October.
Giddens has asked for the creation of an insurance fund that would help to protect customer funds if something similar occurred in the future.
“With such a fund in existence,” Giddens said, “three-quarters of MF Global’s commodities customers would not have been subject to any loss and could have been made whole within days of the bankruptcy filing.”
A new rule approved in December, the MF Global rule, will stop the use of customer funds in the brokerage industry. Many customers for MF Global thought that the money literally vaporized but then in February, news came out that massive chunks of the money were traced to banks such as JPMorgan Chase in the United Kingdom and to other accounts for customers.
After these reports were released it was found that an employee from MF Global was approved to move $165 million of the funds from one account to another in less than one minute. This helped to raise suspicion that the company moved the money in an effort to avoid a collapse, which would have been done inappropriately.
Should it be found true that Giddens found the money, no one knows whether or not the money will be returned in full to customers of MF Global. Giddens reportedly has found 80 percent of the customers’ losses. Most experts do not think criminal charges will be filed against executives from MF Global by federal authorities because of the lost funds. Giddens did say that he would support civil fines against Corzine and other executives of the company.Trustee for MF Global Says All Missing Customer Money Accounted For by Jim Vassallo