The trustee liquidating bankrupt broker-dealer MF Global Inc. said he aims to transfer customers’ accounts to other firms before the close of business tomorrow.
The Commodity Futures Trading Commission identified five futures brokers yesterday that might take accounts from MF Global, including ABN AMRO Chicago Clearing LLC, ADM Investor Services Inc., Dorman Trading LLC, FC Stone LLC, R.J. O’Brien & Associates Inc., and Rosenthal Collins Group LLC. The trustee, James W. Giddens, said he plans to move about 50,000 commodity accounts, after getting a judge’s permission to do so.
Giddens disclosed his goal for completing the move in a court filing today opposing an investment fund’s request to transfer an account to another firm, saying it would be disruptive and at odds with a court order.
“The individual transfer of customer accounts would create tremendous disruption and would impede the trustee’s ability to carry out his duty of immediately using his best efforts to effect a transfer of customer accounts” by tomorrow, he said in the filing. Under a court order, customers may only transfer positions to another futures merchant, not funds or collateral, he said.
EMC Master Fund Ltd., an MF Global customer based in the Cayman Islands, had asked U.S. Bankruptcy Judge Martin Glenn for permission to move an MF Global account to Peregrine Financial Group Inc., saying any delay might cause the fund “increased harm and damage.”
EMC asked Glenn also to allow it to move the account’s cash collateral. No other broker will accept the accounts without the cash transfer, said EMC, a commodity fund run by EMC Capital Management Inc.
Glenn rejected the request today, saying the trustee needed to effect a “bulk transfer of accounts” to limit customer losses “within the tight time constraints imposed.”
MF Global Holdings Ltd., the brokerage’s New York-based parent company, run by former New Jersey Governor Jon Corzine, sought bankruptcy protection from creditors Oct. 31 after making bets on European sovereign debt. The firm listed liabilities of $39.7 billion and assets of $41 billion in Chapter 11 papers. The broker-dealer entered bankruptcy court yesterday.
The parent’s case is MF Global Holdings Ltd., 11-bk-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The brokerage case is In re MF Global Inc., 11-ap-2790, U.S. Bankruptcy Court, Southern District of New York (Manhattan).