WSJ: Purgatory for MF Global Customers
As MF Global Holdings Ltd. was sinking in late October, trader Andrew Gochberg thought he was making all the right moves to protect himself if the securities firm failed.
The 52-year-old Mr. Gochberg closed his trading positions at MF Global, leaving the entire balance of more than $1 million in what he thought was a protected account at the New York company.
That account was supposed to be kept separate from the securities firm’s own money.
But after MF Global filed for bankruptcy protection last month following a series of credit downgrades and a plunge in its stock price, $600 million appeared to be missing from those supposedly safe accounts. The day of the filing, trading by MF Global customers was curtailed.
“My entire business has come to a halt,” said Mr. Gochberg, who can’t get to his cash. “I’m angry and I no longer have any confidence in our system.”
More than two weeks after MF Global filed for Chapter 11, some 33,000 customers are stuck in a sort of purgatory, with no access to their cash until a trustee liquidating the securities firm says they can get it.
Late Tuesday night, the office of the trustee, James Giddens, in an apparent response to customer outcries, said he had sought court permission for a transfer of about 60% of the cash in about 21,000 customer accounts still frozen, or some $520 million. If he gains court approval, the statement said, distributions could be made within days. Earlier in the day, his office had acknowledged customer “frustration” and sought court approval to expedite a claims process.
A spokesman for the trustee said this week it is possible customers won’t get all their money back, due to the apparent shortfall at MF Global…….Learn More and Watch Videos
Short URL: http://cubanology.com/home/?p=7120