UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF NEW YORK NOT FOR PUBLICATION 

In re: 

MF GLOBAL INC., 

Debtor. 

Case No. 11-2790 (MG) SIPA 

MEMORANDUM OPINION AND ORDER DENYING MOTION TO COMPEL 

DISCOVERY OF THE MF GLOBAL ADJUNCT LETTERS, FROM JAMES W. 

GIDDENS, TRUSTEE, REGARDING WIRE TRANSFERS, ADDRESSED IN THOMAS 

BAXTER’S CONGRESSIONAL TESTIMONY 

A P P E A R A N C E S:

PAUL HAMANN 

Pro Se

511 Beverly 

Lake Forest, Illinois 60045 

HUGHES HUBBARD & REED LLP 

Counsel for James W. Giddens, Trustee for the SIPA Liquidation of MF Global Inc. 

One Battery Park Plaza 

New York, New York 10004 

By: James B. Kobak, Esq. 

 Jeffrey S. Margolin, Esq. 

 Josiah S. Trager, Esq. 

 Dina R. Hoffer, Esq. 

 

MARTIN GLENN 

UNITED STATES BANKRUPTCY JUDGE 

Paul Hamann (“Hamann”), pro se, filed a Motion To Compel Discovery of the MF Global 

Adjunct Letters, From James W. Giddens, Trustee, Regarding Wire Transfers, Addressed in 

Thomas Baxter’s Congressional Testimony (the “Motion”). (ECF Doc. #916.) James W. 

Giddens, Trustee for the liquidation of MF Global Inc. (“MFGI”), (the “Trustee”), filed an 

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opposition to the Motion. (ECF Doc. #948.) For the reasons explained below, the Court denies 

the Motion. 

BACKGROUND 

The background of this case has already been discussed in numerous opinions of this 

Court and will not be repeated here. On November 4, 2011, the Court granted the Trustee the 

authority to issue subpoenas for the production of documents and the examination of MFGI’s 

current and former officers, directors, employees and other related persons to facilitate its 

investigation into the alleged shortfall in customer-segregated property. (ECF Doc. #34.) In the 

Memorandum Opinion supporting that Order, (ECF Doc. #36), the Court stated that “[t]he 

Trustee must be permitted to conduct his investigation without being required to divulge his 

investigatory steps or the discovery obtained to any other party-in-interest,” and that “[a]n 

investigation as contemplated by [SIPA] cannot be performed effectively if the Trustee is 

required to reveal his investigatory methodology or documents or information discovered . . . .” 

Memorandum Opinion, at 2. 

On February 6, 2012, the Trustee filed his Preliminary Report on Status of His 

Investigation and Interim Status Report on Claims Process and Account Transfers (the 

“Preliminary Report”). (ECF Doc. #896.) The Trustee made available the Preliminary Report 

on his Web site. The Preliminary Report outlined the investigatory conclusions thus far made by 

the Trustee and his professionals without compromising the integrity of the ongoing 

investigation. 

DISCUSSION 

In his Motion, Hamann requests discovery related to alleged wire transfers of segregated 

customer funds to the New York Federal Reserve Bank, JP Morgan Chase, CitiGroup, and Bank 

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of America during August, September, and October 2011, as well as “all relevant documents 

relating to the MF Global letters, regarding wire transfers, addressed in Thomas Baxter’s 

Congressional Testimony.” Motion, at 2. Hamann apparently “believes that the requested 

documents will show that the Chief Council for the Federal Reserve Bank In NEW YORK, had a 

reasonable belief that customer segregated funds were being swept from MF Global to the NEW 

YORK FEDERAL RESERVE immediately before the MF Global bankruptcy filing.” Id. at 1. 

Hamann offers no legal basis for his request. 

In denying another party’s request for Rule 2004 discovery in the chapter 11 proceedings 

for MF Global Holdings Ltd., this Court stated: 

Permitting private-party discovery at this time, either under Rule 

2004 or the discovery rules applicable to contested matters, is 

unnecessary and would hinder the ongoing investigations. Under 

15 U.S.C. § 78fff-1(d), “the SIPA Trustee has a duty to investigate 

the circumstances surrounding the failure of MFGI and report to 

the Court ‘any facts with respect to fraud, misconduct, 

mismanagement, and irregularities,’ as well as ‘any causes of 

action available to the estate.’” The Court has already granted the 

SIPA Trustee the authority to conduct an independent investigation 

on missing customer property and all possible sources for 

recovery. If the SIPA Trustee finds improper transactions 

involving customer property between the Chapter 11 Debtors and 

MFGI, the SIPA Trustee can bring a number of causes of action 

under the Bankruptcy Code to recover missing funds. The SIPA 

Trustee is also investigating other transactions and conduct, 

including potential claims and causes of action against the Chapter 

11 Debtors, their principals, and affiliates. Additionally, the Court 

directed the Chapter 11 Trustee “to undertake a limited 

investigation and thereafter report to the Court on the narrow issue 

whether the funds on deposit in the [MF Global Finance USA Inc.] 

account at [JPMorgan Chase Bank, N.A.], as of the petition date, 

included ‘customer property,’ and if so, how much.” There may 

well be a time when private-party discovery is appropriate, but 

now is clearly not that time. 

In re MF Global Holdings Ltd., No. 11-15059, 2012 WL 280984, at *5 (Bankr. S.D.N.Y. Feb. 1, 

2012) (internal citations omitted). 

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CONCLUSION 

 For the reasons stated in this Court’s February 1, 2012 order in the MF Global Holdings, 

Ltd. chapter 11 proceedings, the Motion is DENIED. 

Dated: March 7, 2012 

 New York, New York. 

 

 _____/s/Martin Glenn_______

 MARTIN GLENN 

United States Bankruptcy Judge 

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