Missing MF Global Funds Could Total $1.2 Billion
James W. Giddens, the trustee assigned the task of liquidating failed broker MF Global Holdings Ltd on Monday said that the amount of money missing from customer accounts may be as much as $1.2 trillion, double the amount initially reported missing. “At present, the Trustee believes that even if he recovers everything that is at U.S. depositories, the apparent shortfall in what MF Global management should have segregated at U.S. depositories may be as much as $1.2 billion or more,” from a statement Giddens issued to the media Monday afternoon. The statement also noted that the estimate provided is preliminary, and the actual amount of money missing could be even higher.
MF Global filed for bankruptcy protection on October 31st after failing due to a series of bad bets on European debt investments. Just a few days later, authorities including the FBI and SEC announced they were investigating the brokerage, which was once run by former New jersey Governor Jon Corzine, after it was discovered that more than $600 million was missing from its customer accounts. If the company dipped into customer accounts to pare its own losses, it’s likely that it violated a number of securities regulations.
So far, MF Global, Corzine, nor any of the firm’s employees have been charged with any wrongdoing. The investigation is ongoing, however, and comments from investigators have included calling the firm’s activities prior to the bankruptcy filing suspicious. Spokesmen for the FBI, the SEC, and the Justice Department declined to comment on Giddens’ statement.