NEW YORK—The trustee overseeing the bankruptcy of New York-based broker-dealer MF Global said on Monday that the amount of “missing” customer funds could double in its latest estimate.
The amount of customer accounts, which should have been segregated and not be used for the firm’s own trading, may now be short by “$1.2 billion or more,” said, James W. Giddens, trustee overseeing the liquidation of MF Global. The latest estimates are double the amount originally feared.
“The Trustee to date has brought approximately $3.7 billion under his control …,” an announcement from Kent Jarrell, media contact for Giddens, read. The amount of assets currently under the trustee’s control would allow him to pay back U.S. depositories approximately 60 percent of their principal amounts.
“Efforts to collect other funds from US depositories continue around the clock …,” he reported. The amounts collected could increase in the coming weeks, and distribution could be made in early December.
Around $5.5 billion in customer accounts were frozen at MF Global, one day after the company said that it suspected a shortfall in the funds it was required to segregate, according to rules of the Commodity Futures Trading Commission, an industry regulator.
Giddens had been criticized by some MF Global creditors for not dispersing client funds immediately. But he has argued that his approach will better compensate all parties due to the risk of missing funds.
Former New Jersey Gov. Jon Corzine was CEO of MF Global until Nov. 4, when he resigned from his post. Corzine was formerly CEO of investment bank Goldman Sachs Group Inc.
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