CFTC and MF Global Trustee: Firm Assets to Reduce Customer Seg Shortfall

The MF Global trustee, James Giddens, estimates a $1.2B shortfall in domestic customer segregated funds, and a further shortfall of $800M of foreign secured funds exists unless and until foreign jurisdictions allow that money to be returned by foreign MF Global affiliates to the US broker.  However, the CFTC and Giddens take the position that the US broker’s proprietary firm assets will first go toward reducing any such shortfalls before any amount would be paid to creditors. Assuming the bankruptcy judge accepts this position, a key question would then be just how much firm assets there are.  The US broker…

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