NEW YORK, N.Y. - Defunct trading company MF Global Inc. has terminated its entire workforce of 1,066 employees, the trustee for its liquidation said Friday.
James W. Giddens, the court-appointed trustee for the liquidation of MF Global, said in a statement that the company is dismissing workers in accordance with a bankruptcy court mandate. Between 150 and 200 former employees are being hired to assist with the liquidation and court proceedings.
The company did not specify which employees it will rehire, presumably on a temporary basis, to help conduct the liquidation. A call to the trustee's office for further details was not immediately returned. A spokeswoman for MF Global did not provide immediate comment.
MF Global is facing a legally complicated liquidation. Regulators say $600 million in client money is missing. Other money that the company collected from clients has been frozen by a bankruptcy judge as he evaluates competing claims for the money.
Big derivatives clearinghouses such as IntercontinentalExchange Inc. have asked the judge to release that money to the clients who posted it.
MF Global collapsed after making a disastrous bet on European debt. The company traded derivatives contracts whose value was based on the value of an underlying asset, like interest rates, oil prices or currency rates.
MF Global was one of the biggest players in the derivatives market. Regulators are investigating whether the firm used money from clients' accounts as its own financial condition worsened. That would be a violation of securities rules.
MF Global did not immediately return a call seeking comment. It said in a statement that all the employees were notified of their termination Friday. The company said it is working to vacate its headquarters in New York as soon as possible and will close the facility. It said it would rent cheaper office space to house the small group of employees working on the liquidation.
The company has already transferred $1.5 billion in funds from 17,000 customer accounts to other derivatives and commodities merchants, the trustee said. Its parent company, MF Global Holdings Ltd., is involved in separate insolvency proceedings, he said.
It wasn't immediately clear how MF Global's Canadian operations were affected, and calls to both the company's Toronto and Montreal offices were not answered on Friday afternoon.
Last week, the Investment Industry Regulatory Organization of Canada said a bankruptcy order had been obtained for MF Global Canada Co.
KPMG Inc. has been appointed trustee in bankruptcy and will work in consultation with the Canadian Investor Protection Fund and others to verify all customer accounts and to determine the financial position of the firm.
With files from The Canadian Press