Legal

Harris Bank Embroiled In Hunt For MF Global Customer Money

Harriet Davies Editor - Family Wealth Report 10 November 2011

Harris Bank Embroiled In Hunt For MF Global Customer Money

As federal authorities look to track down the missing $600 million in customer funds from recently-bankrupted MF Global, Chicago-based Harris Bank has been one of the starting points, Reuters reports.

One of the bank’s branch offices in downtown Chicago was the main repository for MF Global customer money, the news service says, citing customers and representatives of smaller investment firms that introduced clients to the brokerage firm.

A spokesperson for James Giddens, the New York attorney who has been approved by the bankruptcy court to oversee the liquidation, is quoted as saying: "the trustee is aware that some MF Global Inc customer funds went through Harris Bank."

In their investigations, one of the things authorities are reportedly examining is what happened with the customer money held in segregated accounts at Harris Bank. More widely, they are investigating whether the $600 million was inappropriately diverted from segregated accounts.

As some of MF Global’s customer tried to withdraw funds in the week prior to the firm filing for bankruptcy, a share of these customers received checks that would draw on a Harris Bank account, in place of the money they had requested, the news service says. Following the bankruptcy, these were rejected for payment.

Harris Bank had not provided any comment at the time of publication.

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