Ilya Marritz covers business for WNYC.
MF Global Accounts Started to Empty 5 Days Before Bankruptcy: Trustee
Monday, February 06, 2012 - 05:22 PM
Money began to disappear from customer accounts on October 26, 2011, five days before MF Global filed for bankruptcy, according to James Giddens, the trustee tasked with recovering funds for former clients of the commodities and stock brokerage.
Money began to disappear from the accounts of MF Global’s customers five days before the commodities and stock brokerage filed for bankruptcy, according to the trustee tasked with recovering funds for former clients.
In a preliminary report released Monday, James Giddens, the trustee, said that after months of scouring hard drives and interviewing staff, he's traced most of the missing $1.2 billion of customer money since MF Global went belly-up last October.
Giddens didn’t say exactly where the money went or whether it would be able to be recovered. He also described a "chaotic situation" in the firm's final days, as MF Global struggled to cope with collateral calls and an increasing number of withdrawals.
The funds now missing were supposed to be "segregated" or protected, but it appears MF Global used the cash to cover its own mounting expenses.
Former CEO and ex-New Jersey Governor Jon Corzine has said he cannot explain where the money went.