MF Global vendors received threatening letters

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When MF Global collapsed in 2011, Lorie Meg Karlin’s brokerage company nearly disappeared along with it.

The New York Times reports that the company, Managed Capital Advisory Group, cleared trades through MF Global and was owed more than $100,000 in commissions from the firm.

Ms. Karlin, a widow who runs Managed Capital from her Westchester County home overlooking a horse farm, figured that MF Global was unlikely to pay her.

James W. Giddens, the court-appointed trustee liquidating the brokerage unit, recently warned Ms. Karlin’s company that he was 'considering whether to seek to recover' $529,000 it received from MF Global in the months before its bankruptcy.

Ms. Karlin’s 15-year-old company is not the only one on Mr. Giddens’s radar. It is one of about 140 brokerage companies and other MF Global vendors swept up in the trustee’s pursuit of cash.

Under United States bankruptcy law, Mr. Giddens must verify whether MF Global’s eve-of-bankruptcy payouts to the companies were in the 'ordinary course of business' and were not 'preferential'.

These struggles were largely overshadowed by the stunning loss of customer money at MF Global - more than $1bn belonging to farmers and other clients was missing - and a regulatory investigation into the firm’s chief executive, Jon S. Corzine, the former governor and United States senator from New Jersey.

MF Global owes more than $25,000 to Joseph J. Mazza’s company, Compliance Supervisors Inc., which conducted inspections of MF Global’s branch offices.

But Giddens is contemplating clawing back a similar amount that Compliance Supervisors received from MF Global in the 90 days before the bankruptcy.

To access the complete New York Times article hit the link below

Threatening Letters Sent to 140 MF Global Vendors

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