MF Global Trustee Given Approval to Begin Paying Customers
Customers of failed brokerage MF Global Holdings Ltd will be able to recoup some of their losses soon after a judge on Thursday approved a plan submitted by the trustee tasked with liquidating the firm to distribute some $520 million in cash. The payout represents approximately 60 percent of the $869 million in commodity customer accounts that have been frozen since MF Global filed for bankruptcy.
According to James Giddens, the trustee liquidating the company's assets, the $520 million will be distributed to some 22,000 MF Global customers, and Gidden will begin sending out the payments on November 21st. In the meantime, officials are still searching for $600 million that was allegedly missing from customer accounts when MF filed for protection from creditors.
MF Global, which was once run by former New Jersey Governor Jon Corzine, lost billions of dollars on bad bets on Europe when the ongoing eurozone sovereign debt crisis kicked in, prompting the bankruptcy filing. When bankruptcy officials began looking through the company's books, it was discovered that $600 million had gone missing, fueling the ongoing probe. According to several reports, federal prosecutors in New York and Chicago have issued subpoeanas in the investigation. So far, MF Global has not been charged with any wrongdoing, nor have any of its employees.
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