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New MF Global Internal Documents Now Available
February 15, 2012
[ by Melanie Gretchen ]
Louis Freeh, the MF Global Holdings trustee, has agreed to turn over thousands of internal communications dating back to 10/17/11, which will be made available to federal investigators and James Giddens, trustee for MF Global Inc., the broker-dealer arm. The documents, which had been long sought after. Weeks of negotiations were exacerbated by news reports that the dispute over the documents was hampering the federal investigation.
In his filing on Tuesday, trustee Louis Freeh, former director of the FBI, disclosed that we would partially waive attorney-client privilege, in order to grant access to federal authorities and James Giddens. Access will not be provided to creditors and others with claims against MF Global. Since collapse of the brokerage firm on 10/31/11, only Mr. Freeh's team has been able to go through the emails, and now they have the opportunity to share them with others involved in the federal investigation.
The Communications. The newly furnished emails and documents, which belonged to top executives and general counsel Laurie Ferber - all of whom were principally employed by MF Global's parent company. It is for this reason that the documents remained in the possession of Mr. Freeh, who did share some with Mr. Giddens - though with the understanding that the information was off limits to law enforcement and other outsiders.
Prior to the decision by Mr. Freeh to share, the government had access to more than 10,000 other e-mails and internal documents that belonged to MF Global's brokerage unit. These new documents and emails, however, are expected to shed new light on how the firm misused customer money.
Conflicting Interests. While Mr. Giddens is charged with returning money to wronged customers, Mr. Freeh is seeking to recover money for MF Global's creditors. Three months after MF Global's bankruptcy filing, clients still do not have access to about a third of their money. Then last week, Mr. Giddens announced an increase in the estimated amount of customer funds that were missing - from $1.2 billion to $1.6 billion. Of those funds, $700 million remain overseas, in the possession of the trustee for the U.K. affiliate.
For more details, go to [Dealbook, 2/14/12].

