Progress Report of the SIPA Trustee of MF Global Inc.
On October 31, 2011, James W. Giddens was appointed as the trustee (“Trustee”) in the liquidation of MF Global Inc. (“MFGI”) pursuant to the Securities Investor Protection Act (“SIPA”), by the Honorable Paul A. Engelmayer, United States District Court for the Southern District of New York, as set forth in the Order commencing liquidation. A copy of the Order is available on the Trustee’s website, www.mfglobaltrsutee.com, which was quickly set up tocommunicate with customers and others about the unfolding developments.
The Trustee and his staff are working closely with the Securities Investor Protection Corporation (SIPC), the Commodities Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC), and also with the Chicago Mercantile Exchange (CME) and other exchanges. During the first week of the liquidation process, the Trustee quickly made significant progress in fulfilling his mandate to protect the customers of MFGI:
· On November 2, the Trustee obtained an emergency order from the Bankruptcy Court for the Southern District of New York authorizing the transfer of thousands of commodity customer account positions to other futures commodities merchants and worked with Designated Clearing Organizations and regulators through the first week and weekend of the liquidation to effectuate the transfers.
· By November 4, the end of the first week of the liquidation, the Trustee had established a process for the potential transfer of MFGI’s customer securities accounts to another SIPC member firm.
· On November 7, the Trustee filed a motion requesting authority to use a streamlined process to return misdirected wires sent to MFGI post-bankruptcy.
· As of November 7, approximately 17,000 customer account positions and approximately $1.5 billion in customer account funds have been transferred to other future commodities merchants. The Trustee and his advisors continue to facilitate the transfer of additional customer account positions and customer account funds.
· On November 4, the Bankruptcy Court issued a Memorandum Opinion confirming the Trustee’s subpoena and authority to conduct an independent investigation.
· The Trustee’s investigation into the business and affairs of MFGI is underway and will be thorough, deliberate and independent. The Trustee’s staff has secured MFGI’s offices in New York and Chicago. The Trustee has retained Ernst & Young forensic accountants, while Deloitte has been retained to assist in account transfers, claims processing and administration of the liquidation process.
The Trustee will be establishing a claims process, which will need to be approved by the Court, for the customers and creditors of MFGI consistent to his duties under SIPA to identify and marshal assets available to satisfy customer claims and to maximize the estate for all stakeholders in an orderly and fair process.
Immediately after MFGI’s bankruptcy filing, the Trustee established a website and a call center to facilitate communications with the customers and creditors of MFGI. The Trustee expects that the website, www.mfglobaltrustee.com, will be the primary method by which he will communicate important information and notices to customers and creditors of MFGI. Additionally, the Trustee plans to issue interim reports similar to the reports that have been issued in other major SIPA liquidations, such as the SIPA liquidation of Lehman Brothers Inc.