MF Global Investigators Free to Turn Over Documents

MF Global Investigators Free to Turn Over DocumentsIn a much-needed break for investigators, the trustee of MF Global Holdings Ltd. bankruptcy proceedings will give federal investigators a large volume of documents from the firm’s last days. Many believed the missing documents had been holding up the investigation.

According to the bankruptcy court overseeing the MF case, the trustee overseeing the firm’s liquidation, Louis Freeh, the former Federal Bureau of Investigation director, will surrender the documents that had been created in the two weeks prior to the firm’s Chapter 11 bankruptcy filing on Oct. 31, reported The New York Times. This includes thousands of internal firm emails and many allegedly came from top executive and general counsel, Laurie Ferber.

Freeh had been holding onto the documents from the investigators, with specific ones related to MF Global employees, referencing client-attorney privilege. As trustee, Freeh’s office had been investigating the trail of an estimated $1.6 billion of missing customer money.  This had caused tension between the different parties but now that Freeh’s office has had a chance to review the documents, the two sides could get along better.

The Commodity Futures Trading Commission had also been trying to obtain documents from Freeh’s office. They did not comment after Tuesday’s news.

What the documents will uncover remains to be seen but Freeh’s team of lawyers have spent months pouring over the communications and according to The New York Times, they did not find intentional wrongdoing.

From Tuesday’s waiver, federal authorities and James W. Giddens, the trustee attempting to obtain the more than $1 billion of missing customer funds will have the opportunity to review the documents but it cannot be reviewed by creditors and others parties with claims against the firm.

Kent Jarrell, spokesman for Giddens, said of Tuesday’s news, “We had been working with Freeh’s office since December to try to get an agreement, which will help all the investigations currently underway into the demise of MF Global.”

Giddens has kept busy without access to the waived documents and announced last week that MF Global’s commodity customers are due at least $1.6 billion, an amount considerably higher than initially thought. The increased number shows the challenges the trustee has faced from the getting back the $700 million in customer money from overseas accounts.

He also revealed last week that his investigators had discovered the majority of  missing customer cash from MF Global. The monies had been sent to banks, clearinghouses and securities customers, according to The New York Times.

Meanwhile, Freeh’s decision to turn over documents needs court approval. The ruling is expected to come on Tuesday, Feb. 21 by bankruptcy court Judge Martin Glenn.


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