That's what's always happened in the past. Legally assets in a segregated account do NOT form part of the FCM's assets. Unlike a bank deposit which becomes cash owned by the bank, with the bank having an offsetting liability to you. But that's only for the cash that is there. The shortfall in a seg account has to be claimed for in the bankruptcy court - where, luckily, we are right at the front of the queue, ahead of the bondholders and lenders. Unfortunately missing cash or any other kind of security in a futures account is not covered by SIPC insurance. This is shoddy IMO and political in nature - let's protect mom and pop stock investors but not evil futures speculators
It's like someone broke into your home and stole your TV. They get caught and declare bankruptcy. You will still get your TV back if it is found.
Good question. My guess would be yes as customers who have lost money are not creditors at all. Does anyone know if MF Global has any secured creditors? Right now the managed futures industry needs to act collectively and appoint a lawyer to clearly explain to the presiding judge what the consequences are of not making client accounts whole and rapidly releasing ALL ASSETS to other FCMs. The CME/CFTC has spent several decades developing the futures trading industry around the concept of segregated accounts being untouchable. I doubt they want to see this all unravel in a week or two..
They pledged their sovereign debt holdings for the repo correct? Hence, the demands for further collateral.
The secured creditors (or whoever got customer funds) need to ask themselves if they knew or should have known that the funds were the result of a fraudulent transfer. I doubt they want to open that can of worms. The bankruptcy court cannot allow a creditor to profit from the illegal actions of a debtor.