[ by Howard Haykin ] An MF Global trustee on Wednesday offered good news and bad news for customers whose $1.6 billion in funds are stilling 9 months after the firm collapsed.

• Bad News: a $1.6 billion gap in missing customer cash remains.
• Good News: Trustee James Giddens has so far retrieved about 80% of the money and predicts customers could recoup about 90% of their missing funds.

Giddens provided that information during testimony before the Senate Agriculture Committee.  He added that, to pay customers 100% would entail "a time-consuming and uphill battle." Contrasting Report from the Other MFG Trustee, Louis Freeh. Giddens' warnings came in stark contrast to testimony from Louis Freeh, another MF Global trustee, who is responsible for making the brokerage firm's creditors whole.  In written testimony for the Wednesday's hearing, Mr. Freeh referred to the $1.6 billion gap as an "alleged shortfall."  Mr. Freeh, former FBI director, who could not attend the hearing because of a conflicting commitment, said he believed "all of the customers of MF Global Inc. eventually will be made whole." Why the Difference Between Trustees. It stems from the divergent missions of the two trustees, who have spent months clawing over a limited pool of assets. Bankruptcy law is fuzzy as to which group takes priority.  Mr. Giddens, in charge of unwinding the brokerage arm of MF Global, must return money to customers who suffered a shortfall when the firm collapsed on 10/31/11.  But Mr. Freeh, as advocate for creditors like banks and other companies, is pursuing more than $2 billion in claims against the brokerage unit. That pursuit gives Mr. Freeh the incentive to forecast a happy ending for MF Global customers. If the customers are made whole, then Mr. Freeh's effort will not been seen as an aggressive attempt to deprive clients of their money. But Mr. Giddens noted that the $2 billion or more in claims have forced him to keep a cushion of cash on hand that otherwise would belong to customers. The demands, he said, "stand as a very significant impediment." "We appreciate Mr. Freeh's confidence," Mr. Giddens said, but he cautioned that the hunt for cash will be "time consuming" and uncertain. Others Giving Testimony. In addition to the trustees, lawmakers heard testimony from top officials at the CFTC, including Chairman Gary Gensler, who focused his testimony on potential measures to better protect customer money.  Such efforts gained new focus in recent weeks Peregrine - another futures brokerage firm - collapsed amid revelations that its CEO had raided customer accounts for 20 years. Jill Sommers, the CFTC Commissioner overseeing the investigation into MF Global, assured lawmakers on Wednesday that "our division of enforcement is actively engaged in the investigation."  "We have a dedicated team working on this every day," said Ms. Sommers, adding that the agency's investigators are "proceeding as expeditiously as they can." While Commissioner Sommers did not criticize MF Global senior management, trustee Giddens, who has conducted his own investigation of MF Global's final days, sharply criticized the firm's senior executives for allowing the customer money to vanish - including Jon Corzine.   [Dealbook, 8/1/12]