MF Global Investigators Said to Track Down 90% of Customers’ Missing Money

By Silla Brush - Feb 2, 2012 2:40 AM GMT+0700

Investigators probing the collapse of MF Global Holdings Ltd (MFGLQ). have located almost all the client money that went missing when the broker filed for bankruptcy last year, according to a person briefed on the matter.

The investigators have tracked about 90 percent of the missing funds, which were supposed to be kept in segregated accounts for futures customers, to other customer or bank accounts, said the person, who spoke on condition of anonymity because the investigation is private. The bankruptcy trustee overseeing the liquidation has estimated that as much as $1.2 billion in customers’ funds went missing.

The Commodity Futures Trading Commission, Securities and Exchange Commission, Justice Department and bankruptcy trustee are investigating MF Global, which filed for bankruptcy protection on Oct. 31.

Investigators are attempting to determine which transactions involving customer funds were illegitimate, Jill E. Sommers, the senior CFTC commissioner overseeing the investigation, said in an interview in December.

If a transaction that was legitimate in the beginning “becomes illegitimate” later in a chain of transactions, then the chance of recovering the funds could be slim, she said. “It may be gone,” Sommers said in December.

To contact the reporter on this story: Silla Brush in Washington at sbrush@bloomberg.net

To contact the editor responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net