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Insights, analysis, and updates from the National Introducing Brokers Association

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MF Global Updates
1 min read

MF Global customers to be fully reimbursed, trustee says

Today marks the beginning of a $6.7 billion payout to the former customers of MF Global Holdings. The process is expected to take several weeks but will return all the money that is owed to the approximately 26,500 former commodities and securities customers of the failed brokerage. "Checks are going in the mail that will make all public customers of MF Global Inc. 100% whole," trustee James Giddens said in a statement. Read Full Article at FIA SmartBrief

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MF Global Updates
7 min read

Request for Comments – CPO/CTA Capital Requirement and Customer Protection Measures-Comments Due by April 15, 2014

NFA regularly reviews the continued effectiveness of its regulatory requirements. Over the past three years, NFA has issued 26 Member Responsibility Actions (MRAs), and 92% of those MRAs were against CPO and/or CTA Members. Most of these matters involved misuse of customer funds (including one CPO that improperly used pool funds because it had insufficient assets to operate as a going concern) and/or misstating net asset values and/or performance information. In light of these actions, NFA is reviewing the current regulatory structure applicable to CPO and CTA operations. In particular, NFA is looking at ways to strengthen the regulatory structure governing CPO operations to provide greater protection for customer funds. Additionally, NFA is exploring ways to ensure that CPOs and CTAs have sufficient assets to operate as a going concern. NFA’s Executive Committee approved the issuance of this request for comments to solicit CPO and CTA Member input on the...

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MF Global Updates
2 min read

Peregrine Financial Trustee Seeks to Return $41 Mln to Clients

Peregrine Financial Group's bankruptcy trustee plans to return up to $41 million to former customers of the failed futures brokerage in the second payout since the firm collapsed 17 months ago. Court-appointed trustee Ira Bodenstein is seeking to return about 7 percent, or $27.5 million, to Peregrine customers who traded on U.S. exchanges, according to court filings. In the first payout last year, the group, which comprised the bulk of the firm's clients, received back about 30 percent of the money they had in accounts when Peregrine failed. Clients who traded on foreign markets would get back about 45 percent more of their money, or $13.5 million, in the second payout, court documents show. They received back about 40 percent of their missing money in the first payout last year. A hearing on the trustee's motion is set for Dec. 18. "Just in time for the holidays, former customers of...

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MF Global Updates
1 min read

Corzine loses bid to dismiss lawsuit

Jon Corzine, former CEO of MF Global, lost a bid to dismiss litigation that seeks to hold him, other executives and banks responsible for the company's bankruptcy. "Defendants' contentions would suggest that ... perhaps the debacle must have been the fateful work of supernatural forces, or else that the explanation for a spectacular multi-billion dollar crash of a global corporate giant is simply that 'stuff happens,' " U.S. District Judge Victor Marrero wrote in his ruling.  >Click here to read the full article

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MF Global Updates
2 min read

MF Global Trustee's Advance of General Estate Assets to Make Customers Whole May Speed Distributions to Introducing Brokers

The MF Global trustee has received court approval to advance more than $600 million of general estate assets to customers to allow 100% distributions to all customers. As a result, introducing brokers with general unsecured claims may sooner receive partial interim distributions. It is unclear whether the advance will result in introducing brokers ultimately receiving lower recoveries. While a portion of the advanced assets represents relatively certain future recoveries of customer assets, a portion also does not. Nonetheless, all future recoveries of future customer assets, including those from pending class action litigation, will be allocated to the general estate and may or may not completely satisfy the full amount of the advanced funds. Therefore, it is unclear whether the advance will ultimately deplete the size of the general estate and thus the amount available to introducing brokers and other general creditors. In the trustee's motion requesting the largest portion of...

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MF Global Updates
1 min read

MF Global Trustee Plans to Return More Customer Funds

MF Global trustee James Giddens has asked a bankruptcy court for permission to return the remaining money owed to the firm's customers who traded on domestic exchanges. "The relief sought in this motion, if granted, should allow every one of the more than 26,000 former customers of MFGI with allowed net equity claims to be paid in full before the end of the calendar year," a court filing said. To read the full article, go to www.reuters.com

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MF Global Updates
2 min read

MF Global Trustee Issues Letters to IBs Threatening to Claw Back Commission Payments Received Within 90 Days of Bankruptcy Filing

The SIPA trustee of collapsed futures broker MF Global, Inc. (“MFGI”) recently issued letters to many IBs asserting that the trustee may file preference actions to recover commission payments made by MFGI to the IBs within 90 days of MFGI’s October 31, 2011 bankruptcy filing. The letter indicates that IBs should contact an attorney in the trustee’s office by September 20, 2013 to discuss the issue. Depending on individual IBs’ particular facts and circumstances, there are a number of defenses and arguments that the IBs may be able to assert to such preference actions. IBs should analyze how these defenses and arguments apply to their facts and circumstances and then communicate with the trustee’s office with the aim of getting the trustee to agree either that no amount is subject to a preference action or that the trustee will settle for a mutually acceptable amount. If individual disputes cannot be...

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