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MF Global: Where Did The Money Go?

Regulators are trying to find $600 million belonging to MF Global customers.

One of the biggest mysteries to come out of the MF Global collapse is how $600 million belonging to customers could simply go missing. Part of the reason comes down to poor record-keeping practices, The New York Time reports, a fact that could block regulators' efforts to prosecute those responsible and customers' attempts to reclaim the funds that belong to them.

As the investigation progresses, suspicions are starting to arise, the newspaper reports, with the Securities and Exchange Commission and the Federal Bureau of Investigation getting involved and questioning current and former employees. The Times says that one of the greatest points of focus during the investigation is what happened in the days leading up to MF Global's filing for bankruptcy at the end of October.

"The volume and pace of trading activity that occurs at a brokerage firm undergoing a crisis of confidence makes it almost impossible to keep up," David Pauker, managing director at Goldin Associates, told the newspaper. "A large backlog inevitably results."

In regards to investor relations, Bloomberg Businessweek reports that MF Global remains "optimistic" that the stakeholders will create a plan for repaying creditors. The source notes that JPMorgan Chase gave the company permission to use $8 million in cash collateral at the time it filed for Chapter 11, of which it has only used $2 million.