NEW YORK ( TheStreet)-- MF Global (MFGLQ.PK) is still missing an estimated $600 million more than a week after it filed for bankruptcy, and at least one high-profile accounting expert said Wednesday he is beginning to sense fraud may be the explanation.
"My concern is that at the very end as things got very dire, as liquidity dried up, that you had some people in collusion go in and commit fraud here and I don't know that that did occur, but that's what it's starting to smell like," Lynn Turner, former chief accountant at the Securities and Exchange Commission told Bloomberg Television Wednesday.
A spokesman for the Commodity Futures Trading Commission, one of MF Global's regulators, declined to comment, as did an MF Global spokesman. A call to MF Global's bankruptcy trustee was not returned.
"It's amazing that we're sitting here today trying to find out today what happened with $600 million," Turner said. "It's like it just vanished into thin air and the fact that people today can't tell us where the $600 million went is not a good sign. The fact that they were held in custodial accounts that someone should have been on top of only further complicates the issue and makes it even more concerning."MF Global's bankruptcy filing on Oct. 31 came after the securities dealer disclosed more than $6 billion in bets on European sovereign debt, prompting a ratings downgrade and a stock plunge of 66% in just four days. The failure has raised investor anxiety about the stability of larger securities dealers including Jefferies (JEF), Morgan Stanley (MS) and Goldman Sachs (GS). Jon Corzine, who resigned as MF Global CEO Nov. 4 and Chris Flowers, a major MF Global investor and close friend of Corzine, previously held top posts at Goldman Sachs. -- Written by Dan Freed in New York.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV