At the close of business on October 31, 2011, the SIPC filed suit against MF Global, Inc. because “customers” of MF Global “are in need of the protections afforded under the Securities Investor Protection Act of 1970.”
The SIPC’s lawsuit (pdf), filed in the United States District Court for the Southern District of New York, alleges the SIPC has “determined [MF Global] has failed or is in danger of failing to meet its obligations to its customers.” In its separately-filed chapter 11 petition, MF Global listed $39.7 billion in debts and $41 billion in assets. MF Global’s bankruptcy petition is the seventh-largest in history.
MF Global’s bankruptcy roiled the commodities markets Monday, as floor traders associated with MF Global were locked out of the commodities exchange trading floor.
Separately, today Reuters reported regulators are displeased with the information MF Global has provided. According to Reuters, the “U.S. Commodity Futures Trading Commission, was unhappy with the brokerage’s failure to give it the required data and records. ‘[T]o date we don’t have the information that we should have,’ a source close to the CFTC told Reuters.”
Further, MF Global was “supposed to be able to show us their books and they’re supposed to be able to tell us what’s what and where their customer funds are and how they’ve been segregated and protected and to date we don’t have the information that we should have,” the individual told Reuters.
Doyle Lowther LLP, along with co-counsel, is suing MF Global and others for fraud and antitrust violations in a multiyear scheme to artificially inflate the platinum and palladium commodities markets.