Warning Flags Were Raised in MF Global Transfers

Some MF Global employees were aware of a shortfall in the firm’s customer accounts days before filing for bankruptcy on Oct. 31, according to people involved in the case, a revelation that raises questions about why the firm failed to safeguard client money and whether it withheld information from authorities. One such indication came from an internal document suggesting that the firm was putting customer funds at risk on Oct. 27, an MF Global executive, Christine Serwinski, is expected to tell a Congressional panel on Wednesday. Specifically, the firm had burned through a buffer of its own money and was using the cash of customers who were trading overseas, according to one of the people involved in the case. Read New York Times report here.

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