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MF Global Roundup: MF Global Trustee to Return $685 Million to Customers

Judge still has to sign off and no date has been set.

Published on: Mar 16, 2012

The MF Global brokerage trustee is seeking to distribute another $685 million to customers, giving some of them a return of about 80%.

Commodity customers who traded futures on foreign exchanges will get their first payments of about $50 million, while about $600 million will go to customers who traded on U.S. exchanges, trustee James Giddens said in a statement. Holders of physical assets such as precious metals are in line to get about $35 million.

"We believe that requesting an additional distribution is prudent and appropriate at this time and is consistent with our goal of returning as much customer property as possible," Giddens said.

The distributions require a judge’s approval. No date has been set for the payments.

Senators Want No Bonuses Execs

Members of the Senate Agriculture Committee have written Louis Freeh, the trustee overseeing the bankruptcy of MF Global Holding Ltd, asking him to not award bonuses to top executives, who, they say should be held accountable for the failure of their company. MF Global's bankruptcy last year resulted in an estimated $1.6 billion dollars in missing customer funds. Thousands of farmers, ranchers and small business owners are still owed tens or hundreds of thousands of dollars.

In the letter to Freeh the Senators wrote, - it is difficult to understand why you would even consider paying anyone a bonus while nearly $1.6 billion in customer money is still missing. They emphasized - it is absolutely outrageous to propose paying bonuses to the very people who were responsible for the firm's operational, legal, and financial management at the time customer money disappeared … the failure of leadership in this case is truly unprecedented.

CFTC charges ex-broker

The U.S. Commodity Futures Trading Commission has charged Joseph Welsh III, and ex-MF Global broker, with attempted to manipulate futures prices of palladium and platinum on behalf of his client, Christopher Louis Pia, a portfolio manager at Moore Capital Management. According to the CFTC, Welsh placed large orders just before close to push settlement prices for futures contracts. The complaint specifies 12 separate occasions that Welsh did so between June 2006 and May 2008. The CFTC is seeking civil monetary penalties and other relief, including trading and registration bans.

Barclays offer to buy claims

Barclays Capital has made an offer to customers of MF Global that are still awaiting $1.6 billion in missing funds. The firm has offered owners of U.S. accounts 90% of their entire claim in exchange for any additional funds that may be returned. Foreign accounts would be offered 65% of their original claims. Accepting the offer presents risks to customers. Although they might receive additional funds in the short term, they forfeit the right to any additional cash, perhaps the rest that investigators might turn up later.