Attorney’s for James W. Giddens, the trustee for the liquidation of MF Global Inc. have filed a motion to approve and authorize the establishment of procedures to return misdirected wires including a provision to charge a service fee in such cases.
The motion “seeks to establish protocols, similar to those established in the SIPA proceeding of Lehman Brothers Inc. in this District, 2 to proactively address requests that the Trustee has already started receiving for the return of funds alleged to have been sent in error to MFGI bank accounts, including potential wires intended for the benefit of parties that were previously MFGI customers, but whose accounts were or will be transferred out of the MFGI.”
As part of the motion the trustee is seeking authority to charge a fee for the return. The motions states, “The Trustee seeks authorization to charge a service fee for effectuating all returns, equal to one percent (1%) of the return amount up to a maximum surcharge of five thousand dollars ($5,000.00) per return. The Trustee seeks authority, in his discretion, to waive such surcharge in appropriate situations.”
The motion has created a stir as customers already upset over the handling of customer funds see this as a way to increase fees for the trustee and also a form of “double dipping” as the trustee is already charging a fee for his services.
“What is clear is that the trustee is trying to make as much money as possible,” says James Koutoulas, co-founder of the Commodity Customer Coalition. Koutoulas is representing a group of former MF Global customer and brokers and is looking for the trustee to return all customer segregated fund to their rightful owners.
One industry insider when informed of the motion said, “It just adds insult to injury. What more can they do to these people.”