MF Trustee Traced $105B in Cash Movement

MF Trustee Traced $105B in Cash Movement


MF Global (MFGLQ) Inc.’s $1.2 billion in missing customer funds began to filter out on Oct. 26 as the company’s computers and employees couldn’t keep up with margin calls and increased demands for collateral, according to a trustee who has traced where most of $105 billion in cash went during the company’s final days.

James Giddens, the trustee overseeing the liquidation of the failed brokerage, said today that the company didn’t record all cash movements amid the “unprecedented volume” of transactions in final days before it collapsed. After tracing 84 transactions worth $327 billion, the trustee is still analyzing where some of the money “ended up,” he said today in a statement.

The company moved $105 billion in cash in the last week before its parent filed for bankruptcy and made $100 billion in securities trades, according to the statement. The trades included liquidating customer securities and the firm’s own positions.

`Three Months'
“For three months our investigative team has worked to understand what happened during the final days of MF Global when cash and related securities movements were not always accurately and promptly recorded due to the chaotic situation and the complexity of the transactions,” Giddens said in the statement.

The parent, MF Global Holdings Ltd., once run by former New Jersey governor Jon Corzine, filed the eighth-largest U.S. bankruptcy on Oct. 31 after getting margin calls and bank demands for money. The brokerage is liquidating under Giddens through the Securities Investor Protection Corp. The two cases are in different bankruptcy proceedings handled by two separate trustees.

The brokerage case is Securities Investor Protection Corp. v. MF Global (MFGLQ) Inc., 11-02790, U.S. District Court, Southern District of New York (Manhattan). The parent’s bankruptcy case is MF Global Holdings Ltd., 11-bk-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

source: bloomberg.com