Photo: Business Insider
MF Global has laid off 1,066 brokerage employees, James Giddens, the court appointed trustee, said in a statement this afternoon.Click here for live updates >
This represents the first real move towards liquidation, even though the company had already filed for Chapter 11 bankruptcy protection on October 31. Up to 200 employees will be retained to help the company wind down open trades and process bankruptcy claims.
All terminations are effective immediately, but the bankrupt trading house will continue to pay salaries through November 15. Employees will not be paid severance. Health care for those laid off will end by November 30.
The layoffs represent the end of a possible sale of the trading-firms broker dealer network. Analysts had predicted that a takeover, much like Barclays purchase of Lehman Brothers, would occur. Other divisions, including those in Japan and the United Kingdom, had also come under scrutiny for purchase.
The company has retained both Ernst & Young, for forensic accounting, and Deloitte, for account transfers and claims processing.
MF Global plans to vacate New York offices as soon as possible to lower costs, moving trustee staff to lower cost space.
Julie Steinberg of FINS reports that some of those fired today were at work finding missing client assets that total more than $600 million. Approximately $1.5 billion in client funds and 17,000 client accounts have been transferred to other brokerage houses.
News of these terminations follow severance of 165 employees over the past two weeks. However, those layoffs focused on back office functions and did not include broker-dealers.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.