By Pam Martens: June 4, 2012
James Giddens, Trustee for MF Global Customers
James Giddens, the trustee overseeing the return of customer money at the failed commodities firm, MF Global, this morning filed a 275-page report with the court outlining the firm’s final days and its transformation under CEO Jon Corzine. Read the full report here.
In the report, the Trustee indicates a belief “that there are claims, including claims for breach of fiduciary duty and negligence, that may be asserted against Mr. Corzine, Mr. Steenkamp, and Ms. O’Brien, among others.” Steenkamp was CFO and O’Brien, who took the Fifth before Congress, was an assistant treasurer involved in wiring customer funds to cover overdrafts at other units of the firm. The trustee has previously stated that $1.6 billion in customer funds is missing. Read a Wall Street On Parade report here.
The trustee also indicated that he may be forced to litigate against JPMorgan Chase. The report indicates that “To date, JPM has returned $89.2 million in customer property and $518.4 million in non-segregated unallocated MFGI assets, subject to certain reservations of JPM’s security interest in such funds… JPM has cooperated with the Trustee’s investigation, and the Trustee has announced publicly that he is engaged in active discussions with JPM with respect to transfers that the Trustee believes may be voidable or otherwise recoverable. In the event these discussions do not result in an agreement within the next 60 days, the Trustee, if appropriate, will commence litigation.”
Mentioned in the report is Barry Zubrow, the former Chief Risk Officer at JPMorgan Chase who was transferred early this year to handle regulatory matters and public relations. Zubrow’s name has been linked to the failed risk management practices that led to the multi-billion dollar losses in JPMorgan’s Chief Investment Office. That matter will be the subject of hearings at the Senate Banking Committee this Wednesday and again on June 13 when CEO Jamie Dimon will give testimony.
