The amount of customer funds missing from accounts at the bankrupt brokerage MF Global “may be as much as $1.2 billion or more,” the trustee overseeing the firm’s liquidation said Monday.
That would be roughly double the previous estimates of about $600 million.
MF Global collapsed while under the leadership of Jon S. Corzine, who was previously governor of New Jersey, a U.S. senator and the head of Goldman Sachs. MF Global made costly bets on European government bonds.
In a statement, trustee James W. Giddens said the $1.2 billion estimate is preliminary and “may well change.”
Though others involved in the MF Global postmortem had made varying estimates of the shortfall — as of Nov. 1, the Chicago Mercantile Exchange put the figure at $633 million — the $1.2 billion estimate is the first issued by Giddens. The trustee decided that “the fog cleared enough to make that preliminary disclosure,” said Kent Jarrell, a spokesman for the trustee.
A variety of federal and industry authorities, including the FBI, have been trying to figure out why money that should have been set aside for customers is missing and where it went.
“At present, the Trustee believes that even if he recovers everything that is at US depositories, the apparent shortfall in what MF Global management should have segregated at US depositories may be as much as $1.2 billion or more,” the trustee said in the Monday statement.
The trustee said his investigation is continuing “around the clock” in close coordination with the Justice Department and others.