MF Global creditors to form committee, seek recoveries
By Bloomberg News,
NEW YORK — MF Global Holdings creditors looking to recover from the eighth largest bankruptcy in U.S. history may sue the company’s advisers, search for assets overseas and seek information from a probe into the commingling of customer accounts at the brokerage, New York bankruptcy lawyer Lorenzo Marinuzzi said, who isn’t involved in the case.
Creditors seeking a position on a committee that could shape the approach to recoveries met Monday in Manhattan. A trustee overseeing the liquidation of the company’s operating unit, MF Global, started his investigation into possible fraud or misconduct on Friday. The FBI also has started a probe, according to a person familiar with the matter. MF Global has until Jan. 30 to report a detailed list of its assets and debt.
Other regulators, including the Commodity Futures Trading Commission and the Securities and Exchange Commission, are investigating as well. On its first day in court, New York-based MF Global asked for an extension of the usual 14-day window in which to disclose its assets and debts.
CFTC Chairman Gary Gensler, who has recused himself from the agency’s investigation of MF Global, said Monday that the firm didn’t get preferential treatment because of his ties to Jon Corzine, who resigned Friday as chairman and chief executive of the company. Corzine worked with Gensler at Goldman Sachs and during his term in the U.S. Senate.
Gensler, in response to questions from reporters after an appearance Monday at a Securities Industry and Financial Markets Association conference in New York, said the CFTC’s delay of rules governing how brokers can manage client money didn’t show favoritism to MF Global.
“That’s just not the case,” said Gensler, who said he delayed one set of rules in July to give commissioners additional time for review. “I’ve been consistent on this rule, and I allowed more time for others to continue look at it,” he said.