MF GLOBAL LATEST
08 Dec, 2011
In the latest development of the MF Global bankruptcy, it has been revealed that regulators are thought to be about to give differing accounts referring to the timings of their initial concerns regarding the state of the broker-dealer which collapsed at the end of October.
At the time of the company’s downfall, it is estimated that $1.2bn of customers’ money was unaccounted for.
The Chief Executive of CME Group, the futures exchange operator responsible for the supervision of MF Global’s handling of customer accounts, Terry Duffy, said that the company appeared to be in “full compliance” with ring-fencing requirements for customer money only one day previous to when a shortfall of $900m was discovered, according to the Financial Times (FT).
The FT reported that Dennis Cardoza, a California Democrat on the House agriculture committee, said: “Wall Street cannot just shrug this off because it affects the foundations of the very core of their business.” He added: “If investors lose confidence, where will they turn to?”
Regulators will be questioned by lawmakers and MF Global customers will also testify referring to concerns on how markets in the future will be monitored and policed.
According to the FT, John Fletcher, the general manager of Central Missouri Agri-Service, said: “We have believed for decades that risk to segregated customer funds held by members of the clearinghouse was virtually zero.” He added: “Now, we know that was not the case.”