JPMorgan Chase has agreed to a deal that will return $546 million to former customers of trading firm MF Global Holdings Ltd., which collapsed in 2011 with $1.6 billion missing from its accounts. MF Global failed in October after a calamitous bet on European debt spooked its investors, partners and clients. The bankruptcy was the eighth-largest in the United States and the largest on Wall Street since the 2008 collapse of Lehman Brothers. Much of the missing money belonged to farmers, ranchers and other business owners who used MF Global to reduce their risks from fluctuating prices of commodities such as corn and wheat. A House panel has said credit rating agencies and federal regulators contributed to MF Global’s collapse. But it pinned most of the blame on risky strategies by ex-CEO Jon Corzine, the former New Jersey governor.
JPMorgan held MF Global funds in several accounts and also processed the firm’s securities trades. The trustee tasked with getting customers’ money back, James Giddens of Hughes Hubbard & Reed, threatened to sue the New York bank if it didn’t return money that was transferred to the bank from MF Global. By June 2012, JPMorgan had returned $608 million.
