Most Active Stories
Wed November 6, 2013
Judge: MF Global Customers To Recover All Their Losses
Originally published on Wed November 6, 2013 6:35 pm
One thread runs through nearly every story of financial fraud, from Enron to Madoff: Investors bilked out of their money rarely get it back.
So, this lead from The New York Times Dealbook blog caught our attention:
"Two years after $1.6 billion vanished from their accounts, MF Global's customers are now all but assured to collect every last penny."
U.S. Bankruptcy Judge Martin Glenn said Tuesday that he's ready to approve a deal by which MF Global's 26,000 former customers will get everything owed to them by Dec. 31.
The Times says:
"James W. Giddens, the trustee unwinding MF Global's brokerage unit, recovered large swathes of the money and gradually disbursed it to clients. But Mr. Giddens, still facing a roughly $230 million gap, recently petitioned Judge Martin Glenn to free up remaining funds from MF Global Incorporated's general estate.
"Judge Glenn agreed, potentially allowing Mr. Giddens to make customers whole by the end of the year."
As background, Bloomberg reports:
"MF Global Holdings Ltd., the brokerage's parent company, filed for bankruptcy on Oct. 31, 2011, after a wrong-way $6.3 billion bet on bonds of some of Europe's most indebted nations. The company listed assets of $41 billion and debts of $39.7 billion. More than $1.6 billion in customer funds that should have been segregated were missing.
"The trustee, James Giddens, marshaled more than $5.3 billion in assets from MF Global's former exchanges and depositaries, which he said were clearly customer property. He has already made interim distributions to customers. The final distributions will require him to advance funds from the company's general bankruptcy estate."