MF Global Funds Likely Gone

The Wall Street Journal reports that, according to people familiar with the investigation, and nearly three months after MF Global Holdings Ltd. collapsed, officials hunting for an estimated 1.2-billion dollars in missing customer money increasingly believe that much of it might never be recovered.

Many officials now believe certain employees at MF Global dipped into the “customer segregated account” that the New York company was supposed to keep separate from its own assets — and then used the money to meet demands for more collateral or to unfreeze assets at banks and other counterparties as they grew more concerned about their financial exposure to MF Global.

As the probe continues, the findings so far suggest that a “significant amount” of the money could have “vaporized” as a result of chaotic trading at MF Global during the week before the company’s October 31 bankruptcy filing.