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In a new report by the trustee liquidating MF Global Holdings Ltd (PINK:MFGLQ), James Giddens gave a status of his efforts to recoup missing customer funds up to $1.6 billion and provided recommendations that could help avoid a repeat of the chaos that came from the firm’s implosion. One included a “modest protection fund” that would assist futures customers should an identical bankruptcy occur.

Giddens also stated that former CEO Jon Corzine, may face claims for breach of fiduciary duty and negligence. Giddens declined to recommend penalties, but stated that ““I have determined there may be valid claims against individuals and entities.”

“In my capacity as trustee, I will make every effort to ensure that such claims result in the greatest possible returns to customers in an efficient and fair manner, whether those claims are pursued by my office or others.”

This is a shocking turn of events, considering that Corzine was reported to be the next Treasury secretary under President Obama, after Timothy Geithner resigns.

Giddens wrote in his report, according to Reuters, that, “A fund capped at a relatively low dollar amount per customer would suffice to make these customers whole very quickly even in a case with a shortfall the size of MF Global’s.” He added that more than 75 percent of the firm’s customers had claims less than $100,000.

A futures fund could be designed similar to the Securities Investor Protection Corporation, which guarantees customer securities investments up to $500,000, according to Reuters.

One advocate for the fund is Bart Chilton, a Democratic Commodities Futures Trading Commission (CFTC) commissioner. He said, “We have insurance funds for customers who put money in banks; we have it for folks investing in stocks. It makes sense to have insurance for futures customers, too.”

Chilton has previously asked for a similar fund for futures customers.

Also in his report, Giddens recommended that the CFTC enhance its requirements for segregation of customer funds traded on foreign exchanges similar to those for U.S. exchange-traded funds.

He asked that the agency note that all customer assets be segregated from the broker’s funds–independent of being invested at home or abroad.

And one additional recommendation for Giddens was a firm’s officers and directors should be held “civilly liable” for actions including a shortage in commodities funds segregation.

What Giddens didn’t recommend in his report was anything related to potential criminal liability because he believed it was beyond the breadth of his mandate, reported Bloomberg.

He said, “I have determined there may be valid claims against individuals and entities. In my capacity as trustee, I will make every effort to ensure that such claims result in the greatest possible returns to customers in an efficient and fair manner, whether those claims are pursued by my office or others.”

In addition to recovering the funds, the MF Global bankruptcy and its missing funds has been the target of congressional hearings and investigations by federal agencies such as the FBI and the Commodity Futures Trading Commission (CFTC).

Giddens recommendations had also been disclosed at his April testimony with the Senate Banking Committee.

Giddens stated in regards to  JPMorgan Chase & Co. (NYSE:JPM) “voidable or otherwise recoverable.” A JPMorgan spokeswoman, declined to comment