WASHINGTON–After a delay, trading customers of the collapsed MF Global are starting to regain access to their money in accounts that have been frozen since the firm filed for bankruptcy court protection Oct. 31.
The company that operates the Chicago Mercantile Exchange and other futures exchanges said Wednesday that the complex process of combing through MF Global’s customers’ roughly 15,000 futures trading accounts and verifying each balance is taking longer than originally thought.
CME originally set a deadline of Tuesday for releasing the US$1.45 billion in the accounts. Chicago-based CME said in a statement that the accounts are being released on a rolling basis and the process is expected to be completed by week’s end. MF Global collapsed after making a disastrous bet on European debt. Over US$600 million of clients’ money is still missing.
CME, which regulates companies such as MF Global that trade on its exchanges, has been conducting the review with staff of the U.S. Commodity Futures Trading Commission and the trustee appointed by the bankruptcy court.
“We understand the frustration and the need for accurate information,” CME spokesman Michael Shore said. “We are working very closely with the regulators and the trustee to represent our customers’ interests.” Customers use the accounts for trading derivatives, investments whose value is based on the value of an underlying asset, such as interest rates, oil prices or currency rates. MF Global was one of the biggest players in the derivatives market. Regulators are investigating whether the firm used money from clients’ accounts as its own financial condition worsened. That would be a violation of securities rules. The FBI is investigating whether MF Global violated any criminal laws.
The Futures Industry Association said in a statement Wednesday that it was “deeply troubled” by MF Global’s failure and the stress it has put on the market and traders.
“Futures customers cannot afford to have the funds they had deposited to support their positions held up while the claims process runs its course,” the association said of the delay in releasing the frozen accounts.