U.S. bankruptcy judge approves release of about $520M in client accounts to MF Global customers

The judge overseeing the bankruptcy of collapsed MF Global Inc. has approved the release of about US$520 million to trading customers of the brokerage firm whose accounts have been frozen since Oct. 31.

U.S. Bankruptcy Judge Martin Glenn issued an order granting the request of the court-appointed trustee that 60 per cent of the funds in about 23,300 cash-only accounts be returned to customers.

The bankruptcy trustee says the complex process of combing through about 38,400 frozen accounts holding some $5.4 billion to verify balances has taken longer than planned.

However, trustee Jame Giddens says the money could start moving to customers before the end of the month and that he hopes to see 100 per cent of all funds returned in the coming weeks.

Earlier this week, officials looking after bankruptcy proceedings in Canada said a judge had approved turning over the client accounts of MF Global Canada to RBC Dominion Securities.

Holdings in the accounts to be transferred include futures, equity and fixed income positions in a move that will enable owners to access their accounts, which have been frozen in Canada since Nov. 4.

— With files from The Canadian Press