The trustee for bankrupt MF Global Holdings Ltd agreed to share internal documents with officials investigating a massive shortfall in the firm's customer accounts, resolving weeks of negotiations over access to the information.
In a court filing on Tuesday, Louis Freeh, the trustee charged with managing MF Global's assets in bankruptcy, said he will turn over communications related to customer accounts and other business operations to investigators including the Commodity Futures Trading Commission, Securities & Exchange Commission, and James Giddens, the trustee liquidating MF Global's broker-dealer unit.
The information includes emails and physical documents sent between MF Global employees, according to two people with knowledge of the trustee's operations.
The bulk are emails either sent or received by someone in MF Global's general counsel's office, one of the people said. They generally have to do with legal advice offered by both in-house and external legal counsel, according to the court filing.
Freeh had initially claimed attorney-client privilege over the documents, keeping them private, the filing said.
Under the agreement, he will hand over documents pertaining to the two-week period between October 17 and October 31, the day MF Global filed for bankruptcy, the filing said.
The deal is a compromise between Freeh and Giddens, one of the people said. Giddens had initially sought access to a wider range of information, one of the people said.
"We applaud the decision by Mr. Freeh," Kent Jarrell, a spokesman for Giddens, said on Tuesday. "We had been working with Freeh's office since December to try to get an agreement, which will help all the investigations currently under way into the demise of MF Global."
Giddens had previously waived any assertion of attorney-client privilege.
Giddens, along with officials at the SEC, the CFTC, and U.S. attorneys' offices in New York and Chicago, are investigating an estimated $1.6 billion shortfall in accounts of customers of MF Global's brokerage. Giddens said in a statement earlier this month that the firm used customer money to cover corporate transactions in the week leading up to its collapse.
Giddens, the SEC, the CFTC and both U.S. attorneys' offices will have access to the documents under the agreement, according to the court filing.
The SEC declined to comment. A representative for the CFTC could not be immediately reached.
The deal still needs bankruptcy court approval. Judge Martin Glenn, of U.S. Bankruptcy Court in Manhattan, is expected to rule on February 21.
The bankruptcy is In re MF Global Holdings Ltd, U.S. Bankruptcy Court, Southern District of New York, No. 11-15059.
The brokerage liquidation is In re MF Global Inc, U.S. Bankruptcy Court, Southern District of New York, No. 11-2790.
(Reporting By Nick Brown in New York; Additional reporting by Sarah N. Lynch and Christopher Doering in Washington; Editing by Steve Orlofsky)