MF Global Contest Winner Announced

By Lawrence G. McMillan

Two days ago, I received notification from the United States District Court, Southern District of New York, regarding the matter of MF Global Holdings Ltd. Investment Litigation.  The notice says that the Class (former commodity futures customers of MF Global) has settled for 100% of the net equity claims in the lawsuit.  In other words, eventually people got their money back, but it took over two years.  Our first mention of this crisis was in The Option Strategist Newsletter Volume 20, No. 23, dated 12/8/2011.  

I’m not sure how much money from the monstrous fines that the U. S. Government exacted against JP Morgan went into this settlement, but some of it did.

You may recall that we had a contest, inviting people to predict what percentage of the assets would be returned to people.  There were 280 entries in our contest, and the average response was 49%.  22 people had the correct answer of 100%.  

The contest rules stated: “The winner will be the entrant who comes closest to the actual percentage.  If there is a tie, the winner will be determined by random drawing. “ 

Thus, the tie-breaking procedure was for a random drawing of the winner, and that winner is: Sean Turner.

Mr. Turner has no affiliation with McMillan Analysis Corporation, nor is he even known to any of our employees.  The random number process was observed by three separate people, and the calculation was done by a web site that generates random numbers.

Mr. Turner receives a one-year subscription to this newsletter and its hotlines.  All 22 of the entries with the correct answer will also be receiving – via email – a discount coupon for 10% of any of our products.

It is interesting to note that 21 entries predicted a 0% return of equity.  Only 33 of the 280 responses predicted a 90% payout or higher.  Remember, these estimates were made early on in the MF Global lawsuit process – indicating a healthy skepticism that the government was going to be able to do anything about the claims.  I had a jaundiced view originally, too.  For example, I never figured that anyone would be able to get JP Morgan to return that check for approximately $200 million that MF Global had issued to them (from customer funds, it seems) right before the whole company (MFG) went down the drain.

Even with the full settlement, this doesn’t atone for the fact that a number of traders and even companies went out of business because they didn’t have access to their capital or their positions during the time that the bankruptcy trustee froze everything.