MF funds shortfall could top $1.2 bln

MF funds shortfall could top $1.2 bln

NEW YORK (MarketWatch) -- The trustee overseeing the wind-down of MF Global Holdings Ltd.'s brokerage said more than $1.2 billion in customer funds could be missing from the failed firm, more than double the original estimate of missing cash.

Trustee James W. Giddens also said in a statement Monday that he does not have access to funds beyond $1.6 billion already on hand and is "very close to exhausting the funds under his control." Giddens said restoring customer accounts to 60% of their value--a previously announced goal--would require as much as $1.6 billion.

That next step still requires approval of the bankruptcy court and should occur in early December, Giddens said.

Regulators had previously said that approximately $600 million of funds in segregated accounts owned by former MF Global customers was unaccounted for at the time of the firm's bankruptcy filing on Oct. 31.

Giddens also said efforts to collect other funds from U.S. depositories is continuing "around the clock," but the recovery is complicated by assets located in foreign depositories. Recovery of such assets could take more time, Giddens said.

Giddens has estimated that he is overseeing about 38,000 customer accounts, but that number--and how much money those accounts contain--has been fluid as the trustee has scrambled to sort through the brokerage's records.



source: marketwatch.com