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CNBC is reporting is that the MF Global trustee said he has received $1.3 billion in funds, transferred from Harris Bank in Chicago.Harris Bank, a subsidiary of Bank of Montreal, was already connected to the MF Global investigation—they were subpoenaed by the CFTC in its search for the missing $600 million in customer funds. The trustee announced yesterday that the shortfall was actually around $1.2 billion.
CNBC’s Kayla Tausche clarified that the $1.3 billion is unrelated to the $1.2 billion in missing customer funds. At this point, it is still not known where the shortfall in customer accounts ended up, as it is extremely hard to find a trail within MF Global’s messy and complex books. Last week, it was reported that MF Global borrowed money from its clients’ funds without collateral to back it up in its last days before filing for bankruptcy.
The $1.3 billion—which is in cash, securities and foreign currencies—will go directly to the MF Global trustee, James Giddens, and is the last influx of assets that he expects in the MF Global case. The money represents a “cushion” for the trustee’s payouts to MF Global customers who have had their accounts frozen, and will hopefully go towards making the clients whole.
Giddens said at a bankruptcy hearing today that the shortfall in customer funds may exceed $1.2 billion, so it’s not clear if the money recovered will give clients 100 cents on the dollar. In addition, some customers are still facing a long claims process to get their money back.
The $1.3 billion figure represents some relief, but the road ahead is still long.