Nine months after the collapse of MF Global, the trustee trying to recover money from the bankrupt brokerage firm says customers trading in the United States have gotten 80% of their money back.
James Giddens, the trustee for the liquidation of MF Global, told a Senate hearing Wednesday that he has returned $4.7 billion to customers so far. But he also said there's about a $1.6 billion gap between funds owed to customers and what has been recovered.
"My consistent goal remains to return as much customer property as possible as quickly as possible in a fair manner," Giddens said.
Many of the former MF Global customers were individual investors and farmers who used commodities contracts purchased on U.S. exchanges as part of their normal course of business, including hedging against the risk of price fluctuations.
Giddens said he'd like to return 90% of customers' money on domestic exchanges. "Certainly, it'll be an uphill battle to get to 100%," he added.
However, customers who traded with MF Global outside the United States will get far less. So far only $50 million has been returned, but $1 billion worth of claims remain.
Giddens also said he intends to go after former MF Global CEO Jon Corzinefor some of the missing money, saying he's working with those who have filed lawsuits accusing Corzine of breach of fiduciary duty and negligence.
Corzine resigned from his position at MF Global last November. The firm was forced to file for bankruptcy on Oct. 31 after it disclosed $6.3 billion in exposure to troubled sovereign debt from weak European countries, sparking panic among investors.
MF Global has been accused of improperly tapping customers' accounts to help try to stay afloat.
When asked by Sen. Mike Johanns, a Nebraska Republican, whether Corzine, himself ordered the co-mingling of customer and MF Global accounts, Giddens said he didn't couldn't say yet.
"I can't say that the total analysis of that proves that point unequivocally," Giddens said.
Giddens said that one of the biggest "impediments" to returning customers' money are the "substantial disputed complaints" in the courts. For example, some $700 million is in dispute in courthouses in the United Kingdom.
MF Global trustee Louis Freeh, who did not appear at the Senate hearing but submitted prepared remarks, has a rosier outlook than Giddens on the recouping of lost funds.
While Giddens is responsible for returning money to customers, Freeh, the former FBI director, is charged with returning money to financial firms and bondholders that provided credit for MF Global.
Freeh said in testimony that he believes "all of the customers of MF Global Inc. eventually will be made whole."