Tags: MF | Global | Customer | Funds

MF Global Corporate Trustee: Clients to Get Most of Their Money

Wednesday, 01 August 2012 11:53 AM

The trustee overseeing the liquidation of failed futures brokerage MF Global's parent company expressed hope on Wednesday that customers who had faced an up to $1.6 billion shortfall in funds would eventually be returned all of their funds.

In prepared testimony before the Senate Agriculture Committee, Louis Freeh — who is responsible for winding down the parent company, but is not leading efforts to recoup missing funds from the brokerage division — said he is confident that "all of the customers of MF Global Inc eventually will be made whole."

While the comments may offer more hope to thousands of futures-trading customers who have thus far seen a return of only 72 percent of the estimated $5.5 billion in segregated funds that were frozen at the broker when it failed last October, Freeh also said his comments were based only on "currently available public data in the United States and reports issued by affiliates and administrators around the world."

James Giddens, the trustee for the broker-dealer unit, has not expressed as much confidence as Freeh about recovering all of the money.

Speaking before the committee, Giddens said he will soon return to customers who traded on U.S. exchanges 80 percent of their accounts, but has returned far less for those who traded on foreign exchanges. Giddens also said he faces lengthy litigation in order to recover all of the money.

"We very much would like to pay every customer 100 percent," Giddens said, but "it will be a time consuming, difficult uphill battle."

He is seeking to recover some $700 million in Britain that he says belongs to U.S. customers. "We are very hopeful about our success in that litigation but by no means is that assured," Giddens said.

Bankruptcy claims for sale by MF Global customers had risen to around 90 cents on the dollar by early June, reflecting growing optimism that most cash would eventually be restored, although many expect it will take years to do so.

© 2020 Thomson/Reuters. All rights reserved.

1Like our page
Wednesday, 01 August 2012 11:53 AM
Newsmax Media, Inc.
Newsmax TV Live

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved