WASHINGTON -- Most of the $1.2 billion reported missing from the failed brokerage MF Global has been traced to customer accounts and banks, people briefed on the matter told The Associated Press on Wednesday.
Brokerages are supposed to keep customer money separate from company money. That way, customers are protected if the brokerage fails.
But three people briefed on the investigations into MF Global's collapse said MF Global misused client money to repay other customers, business partners and banks who demanded cash as the firm teetered.
The people spoke on condition of anonymity because they were not authorized to discuss the investigations publicly.
They said details about where the money went are being kept under wraps because the publicity could hinder future prosecutions and efforts to return money to MF Global customers.
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