MF Global's Computers Overwhelmed In Final Days

MF Global's Computers Overwhelmed In Final Days - 2/7/2012 , Class Action News, Class Action, Securities News, shareholder class action, claim, litigation, securities action, common stock'>

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MF Global's Computers Overwhelmed In Final Days
Ivy Schmerken

Wall Street & Technology. February 7, 2012
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EXCERPT A report issued yesterday by the trustee of MF Global’s Bankruptcy revealed the chaos that reigned at MF Global in the firm’s final days from Oct. 26 until its bankruptcy filing on Oct. 31, 2011. The four-page statement issued yesterday […] described what led to MF Global’s unraveling in the final week. After a three-month investigation, the trustee’s investigators have traced the majority of the transactions, totaling more than $105 billion, made in and out of MF Global, in addition to $100 billion in securities transactions during its final week of operations. Why did it take three-months to understand what transpired in the futures and commodities brokers last week? Investigators had to piece together the movement of cash and related securities “that were not always accurately and promptly recorded due to the chaotic situation and the complexity of the transactions,” the report explained. The number of transactions executed by MF Global during the last week prior to the bankruptcy escalated to unprecedented volumes. The rush to meet funding needs for collateral, margin and customer liquidations led to billions of dollars in securities sales, draws on credit facilities, and a web of inter-company loans across affiliates, some foreign. MF Global’s trading systems couldn’t keep up with the volume of transactions that were flying out the door to meet margin calls and collateral obligations from exchanges and trading counterparties, suggesting that this contributed to chaos of the final days and investigator’s ability to trace the $1.2 billion in missing customer funds. […]

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