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MF Brokerage Trustee Traces Loss Over Five Days of $1.2 Billion

A trustee’s investigation found that the $1.2 billion in missing MF Global Inc. customer funds began to flow out of the brokerage on Oct. 26, five days before its collapse, as computers and employees fell behind margin calls and demands for collateral.

James Giddens, the trustee overseeing the brokerage’s liquidation, said in a statement yesterday that MF Global regularly used money from the segregated accounts of commodities customers to finance daily activities. A rush to meet collateral requirements led to billions of dollars in securities sales, credit draws and inter-company loans to foreign affiliates, he said.