MF Global trustee gets subpoena power

U.S. Bankruptcy court judge Martin Glenn approved a motion today from the MF Global bankruptcy trustee allowing it to subpoena "for the production of documents and the examination of the debtor’s current and former officers, directors and employees, and other persons.”

In so doing he ruled against a request from the attorney for MF Global (chapter 11 debtors) to modify the order so that MF Global would receive copies of all documents produced to the trustee and the right to attend any depositions taken by the trustee.

In his ruling, which he read aloud during a telephonic hearing, he stated, “The trustee must be permitted to conduct an investigation without being required to divulge investigatory steps with the discovery obtained to any other party including the chapter 11 debtors.”

He went on to say, “In this case there already has been serious allegations of potential misconduct at MFGI (MF Global). On Oct 31, 2011 the general counsel of MFGI advised the CFTC and SEC that a substantial shortage of segregated collateral belonging to customers. Whether management of MFGI or the debtors were involved in misconduct is clearly a proper subject for investigation. The trustee must be able to investigate these allegations without interference from any party and interest.”

The judge authorized access to discovery to the Securities Investor Protection Corporation (SIPC), the Commodities Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) provided the agencies execute confidentiality agreements.

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