The latest news on the MF Global bankruptcy and fallout, published in the John Lothian Newsletter (subscribe here) the morning of November 17, 2011.

In the wake of the MF Global bankruptcy, John Lothian Newsletter has created a special section on JohnLothianNewsletter.com devoted to news, information and commentary. The section features archived news stories featured in the John Lothian Newsletter, analysis and breaking news. Check regularly for updates. See the MF Global news section here.

U.S. Levels Subpoenas in Probe of MF Global
BY DEVLIN BARRETT – WSJ
Federal prosecutors in Chicago and New York have issued subpoenas in the probe of the collapse of MF Global Holdings Ltd., people familiar with the case said, a sign of an intensifying Justice Department criminal investigation as authorities try to track down about $600 million in client funds.
http://jlne.ws/uY5k5P

CFTC’s Gensler: Client Fund Segregation ‘Heart’ Of Derivatives Regulation
By Jacob Bunge and Jamila Trindle Of DOW JONES NEWSWIRES
CHICAGO (Dow Jones) — The model of walling off customer money from that of big derivatives brokers remains central to U.S. regulation of the market, Commodity Futures Trading Commission Chairman Gary Gensler said Wednesday, despite charges that the practice failed customers of MF Global Holdings Ltd. (MFGLQ).
http://jlne.ws/v5pwGz

CFTC Commissioner Remains Focused On Getting MF Global Customer Funds Returned 
By Jamila Trindle Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)–The senior commodities regulator overseeing the investigation into $600 million in missing customer funds at failed broker-dealer MF Global said Wednesday that she remains focused on the immediate problem of getting customer money returned. Commodity Futures Trading Commission member Jill Sommers said for now the issue of how the money went missing is a secondary concern. “Trying to figure out who started the fire is not really my goal right now; I need to get the people out of the building,” Sommers said in an interview.

CFTC Supports Prompt Initiation Of MF Global Customer Claims And Moving
Press Release
The Commodity Futures Trading Commission today supported the Trustee’s application for an expedited claims process in the MF Global, Inc. (MFGI) liquidation, and authorized the transfer of funds for customers with “cash-only” accounts outside of the claims process.
http://jlne.ws/t0THNt

UPDATE: KPMG Still In Negotiations To Sell MF Global Metals Team
By Andrea Hotter – Dow Jones
LONDON (Dow Jones)–Discussions to sell the metals team of MF Global Holdings Ltd. (MFGLQ) are continuing, with no deal yet agreed, a spokeswoman for KPMG, administrator to the U.S. brokerage’s bankruptcy, told Dow Jones Newswires Monday.
http://jlne.ws/s9iZ3w

Statement On MF Global: Next Steps – CFTC Commissioner Scott D. O’Malia
Press Release
Last Thursday, the Commodity Futures Trading Commission (the “Commission”) confirmed that our Division of Enforcement is investigating MF Global, Inc. (“MF Global”) for possible violations of the Commodity Exchange Act (“CEA”) and/or Commission regulations. I fully support the Commission’s efforts to conduct a thorough investigation to determine what happened with the customer funds, how we can return all customer funds as soon as possible, and punish any wrongdoing.
http://jlne.ws/v93xCB

DealBook: With MF Global Money Still Lost, Suspicions Grow
New York Times
Authorities are growing more concerned about what went wrong at MF Global as they comb through some 38,000 customer accounts.
http://jlne.ws/uIuYkV

FIA Commends MF Global Trustee For Efforts To Release Customer Funds
Press Release
http://jlne.ws/uMCXH8

MF Global Is Still Exploring Possible Bankruptcy Financing 
By Joseph Checkler Of DOW JONES DAILY BANKRUPTCY REVIEW
NEW YORK (Dow Jones)–MF Global Holdings Ltd. (MFGLQ) said Wednesday the company is still exploring options to reorganize and obtain a third-party loan to fund a restructuring. “I don’t think we think that that’s a dead item by any means,” said Skadden, Arps, Slate, Meagher & Flom LLP’s Kenneth S. Ziman, an MF Global lawyer, at a hearing in U.S. Bankruptcy Court in Manhattan.
http://jlne.ws/vgQ587

MF Global Holdings Is ‘Optimistic’ of Reaching Stakeholder Consensus
Bloomberg
MF Global Holdings Ltd. (MF) is optimistic about the company’s stakeholders reaching consensus even as the parent company faces hurdles in collecting information from its operating subsidiaries, a lawyer for the company said in Manhattan bankruptcy court.
http://jlne.ws/rLbCut

KCBT Member Letter Regarding MF Global Matter
Press Release
We want to make clear that MF Global’s customer positions at KCBT Clearing Corporation at the time of the bankruptcy filing were in compliance with clearing margin requirements. Almost all customer positions were transferred to receiving FCMs on November 4, and a portion of the customer segregated funds held by KCBT Clearing Corporation for MF Global customers was transferred to the receiving firms per the Trustee directions on November 7.
http://jlne.ws/u7ZdK8

A Dubious Dodd-Frank Milestone: MF Global Takes Us Right Back Where We Started
Forbes
The fall of – and uncertain next steps concerning – MF Global Holdings Ltd. will likely have even more far-reaching consequences than analysts and commentators are currently anticipating.
http://jlne.ws/s5fI39

MF Global Trustee Seeks Cash Release
By Jacob Bunge and Sarah Kent Of DOW JONES NEWSWIRES
The trustee overseeing the liquidation of MF Global Holdings Ltd.’s (MFGLQ) broker-dealer unit has sought court approval to release about $520 million in customer cash still held at the failed firm, according to a court filing late Tuesday.
http://jlne.ws/sQUBm6

Stability Of ECC Processes Proven Yet Again After MF Global Default – ECC Clearing Fund Not Used
Press Release
The stability of the processes and of the risk management of European Commodity Clearing AG (ECC) has been proven yet again in connection with the default of the Clearing Member MF Global UK Ltd.
http://jlne.ws/sdwf2Q

Did Regulations Kill MF Global?
CNBC
As it turns out, MF Global’s decision to bet the farm-and its client’s money-on European sovereign debt was encouraged by regulations and the policies of the Federal Reserve.
http://jlne.ws/rFneCS

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