Skip to main content

Menu

Representing Individual, High Net Worth & Institutional Investors

Office in Indiana

317.598.2040

Home > Blog > Customers to MF Global: Where’s The Money?

Customers to MF Global: Where’s The Money?

MF Global, which bills itself as a “leading cash and derivatives broker/dealer,” is now the subject of a federal investigation after regulators discovered hundreds of millions of dollars in customer money allegedly missing from the company. The story was first reported on Oct. 31 by the New York Times.

According to the article, the missing money came to light just as MF Global was preparing to sell a major stake of its firm to a rival brokerage. Instead, the deal went south, and MF Global filed for bankruptcy.

Among other things, regulators want to know whether MF Global diverted some customer funds to support its own high-risk trades.

MF Global is run by Jon S. Corzine, a former governor and senator from New Jersey. On Friday, Nov. 4, Corzine resigned from his CEO post.

The investigation into the unaccounted-for cash is in its earliest stages. Several reports put the missing cash between $700 to $950 million. In any case, the situation is troubling to say the least.

On Nov. 4, the New York Times’ Deal Book blog writes that “months before MF Global teetered on the brink, federal regulators were seeking to rein in the types of risky trades that contributed to the firm’s collapse. But they faced opposition from an influential opponent: Jon S. Corzine, the head of the then little-known brokerage firm. … While other financial firms employed teams of lobbyists to fight the new regulation, MF Global’s chief executive in meetings over the last year personally pressed regulators to halt their plans.

And now, remaining members of the MF Global’s board are apparently under close scrutiny by regulators and angry former customers. Also, as the Wall Street Journal’s Bankruptcy Beat blog reports, “the trustee overseeing the liquidation of MF Global’s brokerage business is subpoenaing the company’s top brass, including Corzine, in connection with a wide-ranging probe [of the] broker/dealer’s collapse.”

Comments are closed.



« Back to Blog


Top of Page