MF Global's Final Days Look Even Shadier Now

Company may have delayed disclosure of missing funds
By Kevin Spak,  Newser Staff
Posted Nov 15, 2011 4:20 PM CST
In this 2010 file photo, then New Jersey Gov. Jon Corzine listens during an interview with the Associated Press at his home in Hoboken, N.J.   (AP Photo/Rich Schultz, File)
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(Newser) – MF Global’s client accounts may have come up hundreds of millions of dollars short a full four days before the company filed for bankruptcy—and before it notified regulators or anyone else of the problem, sources tell the Wall Street Journal. When the firm filed for bankruptcy on Oct. 31, it told regulators there may have been a shortfall dating back to Oct. 27 or Oct. 28. But on Oct. 28, the company told CME Group its customer funds were fine.

If regulators had known about the shortfall earlier, they might have been able to react differently. Now the Commodity Futures Trading Commission is trying to track down the funds, which they believe were transferred during the week of Oct. 24 in transactions never recorded on the firm’s general ledger. “We’re closer than when we first went in there,” one CFTC commissioner tells Reuters. “The money is not where it should be. I think something nefarious has happened, potentially something illegal.”

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