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MF Global Customers Get Offers for Claims

Some big financial firms have offered to buy the claims of thousands of MF Global customers, whose money went missing after the brokerage firm collapsed last year, the New York Times said, citing people involved in the negotiations.

MF Global filed for bankruptcy after it was forced to reveal it had bet billions on European sovereign debt, a disclosure that led to credit-rating downgrades and unnerved investors. Chief Executive Jon Corzine resigned days later.

James Giddens, the trustee in charge of liquidating MF Global's broker-dealer unit, has estimated that about $1.6 billion is missing from customer accounts.

Barclays, the Royal Bank of Scotland and the Seaport Group, a firm that specializes in distressed assets, are all now scrambling to buy MF Global customer claims, the New York Times said.

On Monday, Barclays Capital, the investment banking unit of the London-based bank, agreed to buy most claims for 90 percent of face value, the people told the newspaper.

Royal Bank of Scotland has said it will pay 91 percent for the claims of institutions, but not individuals, the paper added, citing a term sheet.

The banks do not plan to hold the claims on their books, but will sell them to hedge funds and other clients, according to the newspaper.

Both Barclays and Royal Bank of Scotland declined to comment to the New York Times. The paper said messages seeking comment from Seaport were not returned. None of the parties could immediately be reached for comment by Reuters. (Reporting by Sakthi Prasad; Editing by Mark Potter)

Copyright 2010 by Reuters. All rights reserved.

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