The $1.2 billion in MF Global Inc. (MFGLQ) customer funds estimated to be missing began to flow out of the brokerage on Oct. 26, five days before its collapse, as its computers and employees failed to keep up with margin calls and demands for collateral, according to a trustee’s investigation.
James Giddens, the trustee overseeing the brokerage’s liquidation, said today that MF Global regularly used money from the segregated accounts of commodities customers to finance daily activities. During the firm’s final days, MF Global took out larger amounts as customers fled and 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 in a statement.
The New York-based brokerage moved $105 billion in cash in the week before its parent filed for bankruptcy and made $100 billion in securities trades, according to the statement. The trades included liquidating customer securities and the firm’s own positions. After tracing 840 transactions worth $327 billion, Giddens is still analyzing where some of the money “ended up,” he said.
“For three months our investigative team has worked to understand what happened during the final days of MF Global when cash and related securities movements were not always accurately and promptly recorded due to the chaotic situation and the complexity of the transactions,” Giddens said in the statement.
MF Global often moved money between its own accounts and those of customers in amounts of less than $50 million a day, replacing the cash by day’s end, according to the report.
As cash demands on the firm surged in the last week of October, “much larger amounts were used, apparently with the assumption that funds would be restored by the end of the day,” according to the report. Starting on Oct. 26, “funds did not return as anticipated,” the trustee said.
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a case that is a pure act of corruption & a ponzi scheme to rob innocent people of their money in this bad economy. & then go party with it. as simple as that, just put the money in someone elses name & claim bankrupcy.
CORRUPTION BRINGS A PERSON TO DESTRUCTION