Saturday, February 11, 2012

MFG Client Theft Officially Upped to $1.6 Billion

We are shocked, simply shocked, that MFG bankruptcy trustee James Giddens is having difficulty in recovering the $700 million in stolen MFG clients funds discovered to be transferred to JP Morgan by MFG's British arm.  Giddens Friday added these missing funds to the total shortfall of client funds, raising the MFG client theft officially to $1.6 Billion.  The estimates have now more than doubled from the originally reported $700 million in missing funds.  Only weeks after the collapse, Jim Willie stated to expect $5-$10 BILLION to have been stolen from private accounts by the time all the dust settles.  Looks like we are well on our way to Willie's estimate.

MF Global commodity customers whose cash vanished when the firm collapsed last year are owed $1.6 billion — up significantly from previous estimates — the trustee tasked with recovering the money said on Friday.
The revised figure reflects growing concerns that the trustee will not be able to claw back $700 million in customer money trapped overseas. Until now, the trustee did not include the $700 million when projecting the shortfall, hoping to avoid a battle with MF Global’s British arm, which is holding the customer money.
But now the trustee, James W. Giddens, has acknowledged that he is making little headway in recovering the money from KPMG, the court-appointed administrator for MF Global’s British subsidiary. That money, Mr. Giddens said, was held for American clients who traded on foreign exchanges.

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