MF Global administrator vows to close broker's positions within days

More than 700 staff in London are told they will be paid this month – but their jobs are still at risk

New York

The UK administrators of the collapsed brokerage MF Global expect to have closed out most of its trading positions by the middle of next week, though decisions about what to do with its 725-strong London staff will be put off until after that.

The task of unpicking MF Global's British operations has been made easier by recently introduced changes to bankruptcy procedures for financial firms, said Richard Fleming, one of the three accountants from KPMG who were appointed administrators when the company collapsed on Monday.

But a team of 30 staff has been assigned to smooth relations with financial exchanges, many of which locked out MF Global employees and froze positions when the US parent filed for Chapter 11 bankruptcy in New York. Persuading exchanges and clearing-houses to allow MF Global to complete its trading is vital if money is to be quickly returned to clients.

"We are barely one day in and we are right in the middle of the storm," Mr Fleming said. "But the vast majority of positions will be closed very quickly when we get systems working, probably by the end of this week or early next week."

MF Global's historic UK arm had about $20bn (£12bn) of assets when it went under, capsized by an extraordinary $6.3bn bet on eurozone sovereign debt that was placed with the company's own money from headquarters in New York. The company has its origins in a sugar-trading firm founded more than 200 years ago in London by James Man and it was only spun out of FTSE 100 constituent Man Group in 2007.

The London employees have been told they will receive their salaries this month and no one has been laid off so far. Mr Fleming said "we will need a good number of people for a good time to come", although redundancies are inevitable. MF Global is the first financial firm to be put into a Special Administration Regime, which orders administrators to prioritise the return of client assets and is designed to avoid a repeat of the fall-out from Lehman Brothers, whose collapse froze large parts of the financial system.

The administrators were due to have their first conference call with their US counterparts last night to examine the deep trading relationships between the transatlantic divisions. So far, there have been no indications of any disputes between the two about the ownership of assets, which bedevilled the wind-up of Lehman Brothers in 2008. Mr Fleming is also not expecting the UK arm to be affected by legal problems in the US, where the company has been accused of illegally dipping into client funds during its dying days.

MF Global's lawyers have said that management was not aware of any shortfall in client accounts and the trustee overseeing the bankruptcy hopes money will return to the US accounts as trading positions are closed. Some $600m is unaccounted for, according to some reports.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'