NEW YORK?? The 1,066-member workforce of MF Global Holdings Ltd’s brokerage has been terminated, the latest aftershock to the parent company’s $41 billion collapse nearly two weeks ago.
The trustee in charge of liquidating the brokerage said in a statement that the workers were let go immediately, though they will be paid through November 15 and up to 200 will be rehired to help with the wind-down.
The move comes as the trustee, James Giddens, works to identify and locate the brokerage’s assets, including $600 million in missing customer money.
Some employees reported on Friday that the news was a surprise. A broker in Chicago learned about the termination through news reports and said employees were being called into meetings as the media began reporting the development.
An employee in New York told Reuters that colleagues found out on Friday through television reports rather than through notification by the brokerage.
The trustee is trying to account for all of the brokerage’s assets with help from forensics investigators at Ernst & Young. The trustee said he has also retained Deloitte to help with the transfer of about 17,000 commodities accounts worth roughly $1.5 billion.
Federal agencies, including the Commodity Futures Trading Commission, the Securities & Exchange Commission and the Department of Justice, are investigating whether the money missing from customer accounts may have been improperly mixed with the firm’s funds.
Giddens was appointed to liquidate the brokerage after MF’s parent company declared bankruptcy on October 31, having lost on risky bets on European debt.
The bankruptcy shocked Wall Street, in part because the company was run by former New Jersey Governor and Goldman Sachs head Jon Corzine, who advocated for tough regulations on Wall Street firms during his political career.
Corzine resigned last week, saying he would not seek about $9 million in severance.
SOME WILL BE REHIRED
Between 150 and 200 of the MF Global brokerage employees will be rehired to help with winding down the business and processing bankruptcy claims, Giddens said in his statement.
“The termination of employees and closure of operations is a necessary part of the court-ordered liquidation… and is consistent with the trustee’s obligations,” he said.
The parent, MF Global Holdings, said in a statement that it was “saddened by the trustee’s actions today to terminate so many of our colleagues.”
Giddens also said on Friday that his team is working to clear out the brokerage’s New York offices as soon as possible and rent smaller, less expensive space as the liquidation moves forward.
MF Global’s Chicago offices will continue to be leased for an undetermined amount of time, he said.
The brokerage liquidation is In re MF Global Inc, U.S. Bankruptcy Court, Southern District of New York, No. 11-2790.
MF’s bankruptcy case is In re MF Global Holdings Ltd, in the same court, No. 11-15059.
Copyright 2011 Thomson Reuters. Click for restrictions.
Source: http://www.msnbc.msn.com/id/45260702/
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