Trustee Notes Company May Recover Funds after MF Global Stock Fraud

New York, NYMonths after the news broke over the MF Global stock fraud case, the trustee overseeing the liquidation of the company's holdings brokerage is exploring ways to recover additional customer assets, Dow Jones reported.

MF Global filed for bankruptcy protection on October 31, leaving a shortfall in customer funds that the trustee has estimated to be $1.2 billion.

The full extent of the shortfall won't be known until the customer claims process is complete, the lead counsel for trustee James Giddens, told the news source.

The attorney noted that the trustee is exploring possible ways to recover additional customer funds. So far, the customers are in the process of getting back an alleged 72 percent of their assets, and have until January 31 to file claims in order to recover the rest of the losses.

The legal representation for Giddens noted that the size of the shortfall is "significant" and will "substantially affect the trustee's ability to make a 100 percent distribution to former customers," according to the news source.

The lead counsel made the remarks at a meeting between the trustee and MF Global's former customers at a hotel in Manhattan. Hundreds of former clients attended the event, as they were looking to find out additional information on the whereabouts of their missing funds.

According to the news source, much of the meeting was devoted to comments from the trustee and his staff. They updated the customers on the progress of the company's efforts to locate and acquire the lost funds, as their former clients were also told of the remaining hurdles in terms of getting back their money.

Officials for the trustee noted that his office has received 11,000 phone calls about the bankruptcy, and he is focused on recovering the assets through negotiations, investigation and possibly lawsuits.

"We try to act as the customer's advocate," Giddens' lawyer told the news source.

Bloomberg reported that MF Global has already distributed about $3.8 billion to customers as of January 12.