The trustee overseeing the liquidation of failed futures brokerage MF Global’s parent company expressed hope on Wednesday that customers who had faced an up to $1.6-billion (U.S.) shortfall in funds would eventually be returned all of their funds.
In prepared testimony before the Senate Agriculture Committee, Louis Freeh – who is responsible for winding down the parent company, but is not leading efforts to recoup missing funds from the brokerage division – said he is confident that “all of the customers of MF Global Inc eventually will be made whole.”
While the comments may offer more hope to thousands of futures-trading customers who have thus far seen a return of only 72 per cent of the estimated $5.5-billion in segregated funds that were frozen at the broker when it failed last October, Mr. Freeh also said his comments were based only on “currently available public data in the United States and reports issued by affiliates and administrators around the world.”
James Giddens, the trustee for the broker-dealer unit, has not spoken as optimistically as Mr. Freeh about the hope of recovering all of the money.
Mr. Giddens, who will also appear before the committee, has previously said that investigators have located most of the missing funds, but may face lengthy litigation in order to recover the money.
He is seeking to recover some $700-million in Britain that he says belongs to U.S. customers.
Bankruptcy claims by MF Global customers had risen to around 90 cents on the dollar by early June, reflecting growing optimism that most cash would eventually be restored, although many expect it will take years to do so.