so in the meantime, mr. kobak, i'd like to stroke you understand totally 100% agree that your first primary responsibility to customers. but for the sake of discussion i also brazil as a bankruptcy trustee you were collecting information on all creditors, not just customers. is that if you're a suction? >> that's correct. our primary emphasis at this point is customers, both on security and commodity side but we certainly have fiduciary duty to speak for the sake of discussion all customers, and i'm not suggesting -- for the sake of this discussion let's assume you can get to 100% of the but after the customers were paid, who is the largest creditor to your knowledge at the most? >> i believe the large crater is probably jpmorgan. they were creditor of the holding company but also -- >> again, not to be -- >> i know there was a very large revolving loan. i know they would including thing. i'm not exactly sure [talking over each other] >> hundreds of millions. >> so it's a regulated bank at the other end of this. t

mr. kobak, you may begin when ready. >> thank you. thank you for inviting me to testify today about efforts to identify, preserve, and return assets to former customers of mf global, inc. i'm james kobak, a partner at the law firm of hues harbor and league under the security protection account, and by statute, the trustee is the customers advocate. the trustee's staff, which includes legal experts, consultants, and forensic accountants is focused on looking after the interest of customers and returning assets 20 them as quickly as possible and in a way that's fair and consistent with the law. the trustee appreciates the interest of this committee. we have been working closely and continuously with the securities investor protection corporation, with commissioner sommesr and the commodities future trading commission, with the exchange commission, with the chicago america tile exchange and with other industry members and industry groups. the trustee and everyone working with him understands the f

>> i will let mr. kobak answer as well, but we cannot over emphasize the complexity of these books and records. thousands of accounts, tens of thousands of transactions, and following each of these transactions, the bank reports, looking through, from what i understand from primary accounts, reviewing 300-500 pages of summaries from bank accounts is very complex but. >> mr. kobak, any comment? >> i would support it is very complex. you also have to understand it in the early days of one of these proceedings, one may not have perfect access to books and records. sometimes depositories turn off screens, did not allow access. sometimes system vendors threatened to shut off systems. in our case, we had some issues with the holding company about getting access to documents that both of us had an interest in./ in addition to the sheer scale, there are days where we need to get into the systems and records to review. >> thank you. >> the chair will call from the gentlemen of illinois. you are recognized for five mi

first for mr. kobak. both you and mr. giddens in your previous testimony idly stated that no matter the exact size of the shortfall, speaking of segregated funds, it's probable size, significant and will substantially affect the trustee's ability to make a 100% distribution to former mf global customers. is that still your opinion today? >> good. and thank you for the yes or no answers but they are very rare around here, we really do appreciate it. i know that you do not want to speculate why you're investing is still underway, but they saw mr. duffy's testimony and other reports it seems highly probable that customer funds were transferred out of segregated accounts and co-mingled with mf own funds to out of him understand that at this point. probably to meet margin calls on your positions. i mean, is that -- [inaudible] >> okay. assumed for the moment that is, in fact, what happened. it would mean that the missing customer funds will never be found and some overlooked or, had been hoped for but many customers when they

. >> thank you mr. kobak and now we go to mr.baxter. >> good afternoon chairman nuegebauer, ranking member capuano and other members of the subcommittee. thank you for inviting me to appear here today. i am tom i am tom baxter, general counsel of the federal reserve ancop new york. i will speak about the new york fed's relationship with its primary dealers and more specifically, how a relationship with the former primary dealer mf global inc.. let me start with a short summary of the new york fed's relationship with the regulated institutions that we designated as primary dealers. our relationship with this group of 21 firms is a counterparty relationship, not a supervisory relationship. we are not a supervisor. primary dealers serve as trading counterparties in the transactions that the new york fed undertakes to implement monetary policy. as such, primary dealers are required to participate in consistently as counterparties to the new york fed and purchases and sales of treasury and agency security. primary dealers are also exp