- Feb 10, 2005
- Reaction score
- Montgomery, Al
MF Global Trustee Says Shortfall Could Exceed $1.2 Billion
By MICHAEL J. DE LA MERCED and BEN PROTESS
David Goldman for The New York Times Jon S. Corzine (Dem) on the trading floor of MF Global last year.
The amount of customer money missing from the collapsed trading firm MF Global may be more than $1.2 billion — double previous estimates — the trustee dismantling the firm’s brokerage unit said on Monday.
But the surprise finding, which caught regulators off guard, may be overstated, according to a person briefed on the investigation. Some regulators say they believe that the trustee double-counted $220 million that had been transferred between units of MF Global, this person said.
Still, the much higher number highlights the disarray of MF Global’s records and raises significantly the hurdle for tens of thousands of customers seeking to get their money back. The trustee’s estimate represents a significant portion of customer funds held by MF Global.
Regulators suspect that as investors and customers fled MF Global in the last week of October, the firm used some of the customer money for its own needs — violating Wall Street rules that customers’ money be kept separate from the firm’s funds. Much of that money may never return.
•The trustee's statement
•MF Global Is Said to Have Used Customer Cash Improperly (Nov. 17)
Now the challenge has grown for investigators trying to determine exactly what happened in those last frantic days. Just days ago, investigators believed that they were closing in on what they thought was about $600 million in missing customer funds, according to people briefed on the matter. Regulators were relying on estimates from the firm and the CME Group, the exchange where MF Global did most of its business.