$1.7 Billion Customers' Money Missing From MF Global: The amounts of customer funds missing from MF Global have multiplied from $633 million to $1.2 billion yesterday– and now $1.7 billion today, according to Vincent (Trace) Schmeltz III , the attorney for the 80 member Commodity Customers Coalition…. This new figure is the result of the inability by the Trustee and the CME (the Chicago Mercantile Exchange) to find more than $3.7 billion in customers funds rather than the $5.4 billion projected just after MF Global filed for bankruptcy on October 31….
Both Schmeltz and James L. Koutoulas, the 30 year old CEO of Typhon Capital Management, told me at breakfast this morning that they have been told that as early as August MF Global was reported to be using segregated customers accounts to “meet margin calls” and bolster their trading positions….
The unsecured creditors of MF Global are headed by JP Morgan Chase, which lent the firm over $1 billion, Goldman Sachs, Harris Trust and other banking concerns. Some of the MFG customers who are missing money are furious that Hughes Hubbard, a law firm that has represented JP Morgan in the past, is the legal representative of the Trustee in bankruptcy.
“This is another example of Wall Street favoring Wall Street over Main Street,” Koutoulas told me this morning.
Even amidst all this confusion about MF Global’s segregated accounts, distress investors have been paying 85 cents on the dollar for claims against MF Global, 30 cents on the dollar for MF Global’s publicly traded bonds, and 9 cents a share for the firm’s common stock.