$1.2 bn missing at failed broker MF Global

Some $1.2 billion appears to be missing from the customer accounts of failed US broker MF Global, the liquidator of the company said Monday. That was about double early estimates of missing client funds when the broker, run by Wall Street high-flyer Jon Corzine, collapsed last month after making huge bad bets on European sovereign debt. Liquidation trustee James Giddens said that so far he had recovered $3.7 billion to be returned to clients since MF Global filed for bankruptcy on October 31. But he said there was an "apparent shortfall" in funds that the broker's management should have segregated in customer accounts of $1.2 billion "or more". According to media reports since the bankruptcy filing, regulators are concerned that MF Global management may have tapped customer accounts for money to shore up the company's own finances as worried lenders pulled in credit lines in its final weeks. Last Thursday the Wall Street Journal reported that high-profile federal attorneys in New York and Chicago have issued subpoenas in their investigations into the broker's collapse.