MF Global Commodity-Account Transfers to Brokers ‘Substantially’ Complete
Stock Chart for MF Global Holdings Ltd (MFGLQ)
The transfer of MF Global Inc. commodities accounts to other brokers is “substantially” complete, a spokesman for the liquidator of the bankrupt broker- dealer said.
Many of the firm’s 150,000 customer accounts are “out of date, inactive, or very small,” leaving a much smaller number to deal with, said Kent Jarrell, a spokesman for trustee James W. Giddens.
“It really comes down to about 50,000 commodity accounts, and maybe 400 securities accounts,” Jarrell said in an e-mail today.
Customers will get information about their accounts from the new brokers, he said.
“The new brokers will have the responsibility to call the customers as soon as possible and say, We have your transferred account,” Jarrell said. “We have made it known that we want this process completed as quickly as possible.”
The trustee also has released almost $1.6 billion in customers’ collateral. Many remaining account holders may have to file claims for their assets, which have to be shared fairly with other claimants under bankruptcy law, Jarrell has said.
About $593 million in commodity customer funds are unaccounted for, according to a person with knowledge of regulatory probes into the failure of the New York-based firm.
Unless the missing cash is found, people hoping to recover 100 cents on the dollar may have to give up some of it to other customers, said Stephen Harbeck, president of the Securities Investor Protection Corp., which hired Giddens.
Customers whose accounts remain at MF Global after the bulk transfers that began last week can move, if they find a futures broker willing to take their positions without collateral, Jarrell said. They have until Nov. 11 to move, or their accounts by law must be liquidated, he said. An earlier deadline for liquidation was extended by one week.
EMC Master Fund Ltd., an MF Global customer based in the Cayman Islands, said in a filing last week that no other broker will accept accounts without the collateral.
More MF Global commodity traders sought court permission yesterday to transfer cash out of the brokerage’s accounts, saying they believe the company has the funds needed to make whole each of the account holders.
MF Global’s parent listed $39.7 billion in debt and $41 billion in assets in its bankruptcy filing on Oct. 31. The company was run by former New Jersey Governor Jon Corzine, who was previously co-chairman of Goldman Sachs Group Inc. (GS), until his resignation from MF Global, which was announced Nov. 4.
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