The meltdown of MF Global has left countless investors out in the cold, unable to access their now-frozen accounts.
As of Oct. 31, when MF Global’s parent company – MF Global Holdings – filed for bankruptcy protection, more than 150,000 customer accounts were frozen. The sudden turn of events occurred after MF Global announced it had lost money on a number of bad bets related to derivatives contracts.
The Commodity Futures Trading Commission is continuing its investigation into the collapsed brokerage, after discovering that some $600 million was missing in accounts held by MF Global clients.
On Friday, Nov. 11, MF Global laid off 1,066 employees, keeping only a skeleton staff to help with the dissolution of its business. Employees were notified of the layoffs in town hall meetings at MF Global’s offices in Manhattan and in Chicago, according to the New York Times. Jon Corzine, MF Global’s former CEO, announced his resignation earlier this week.
The MF Global bankruptcy is the eighth-largest bankruptcy ever.
Meanwhile, a federal statute designed to protect customers of failed brokerages may not be able to help MF Global’s commodities customers if the trustee in the case – James W. Giddens – is unable to locate the $600 million in missing customer money.
That leaves more questions for MF Global clients – and fears they may never see their money again.