Since the collapse of MF Global on Oct. 31, 2011, the general consensus of the amount of money that was missing was estimated at $1.2 billion. It now appears that that number may be a bit low, as bankruptcy trustee James Giddens admits those earlier estimates did not include $700 million of customer money being held by MF Global's British branch.
The overseas money was not mentioned two weeks ago when it was announced that almost all of the missing money had been found, although there was still concern and uncertainty about retrieving the money and returning it to customers.
According to Giddens there is very little headway being made with the court-appointed administrator of MF Global's British subsidiary, KPMG as far as getting those funds back into the hands of customers. This money was held for clients trading on foreign exchanges.
This is a similar situation that occurred when Lehman Brothers went bankrupt and a cross-border fight over money trapped overseas broke out. That issue remains unresolved three years after Lehman went under.
It is uncertain what course of action Giddens will take. He could sue KPMG to recover the money. Giddens's office released a statement saying it would attempt to resolve these claims as quickly as possible, but it is uncertain how long resolution will take.
So far customers who traded in the United States have received about 70% of their money back, although the remaining money that has been traced to banks, clearinghouses and the firm's own securities customers has not yet been recovered and it isn't known when that might happen. Meanwhile customers that traded overseas have yet to see any money returned.
"The trustee is eager to make additional distributions to former MF Global Inc. customers as soon as possible," Giddens said in the statement.
Three months after MF Global filed for bankruptcy, the firm's customers, everyone from farmers to hedge funds are feeling the pressure as the delay continues with the numbers still changing.