I agree with you. But their customers signed up for it. It was all in the paper work that one had to sign to use MF Global. The paper work said that MF could and would use a high percentage of the customers funds if they wanted to. Most other brokerages can't and won't do this and it is not in their paper you have to sign. It is bad and they are slim balls. But if one signs up for them to gamble with ones money, when things go bad it is bad. I knew someone who was with another brokerage that was bought out by MF Global and once they read the paper work they switched brokers. I also remember years ago someone on this forum saying to do not go with MF Global. Read the paper work.
Another thing about segregated funds. The way I have always understood it for most brokerages, not MF Global because their paper work is different maybe because they are really and overseas company, is that it is funds not in trades. If you have funds that are in trades, then they are out of the hands of the brokerage and in the markets hands. So if you have a $50,000 account with none in trades and something happens, then you should get all $50,000 back. If you have $50,000 and $20,000 in trades. You should get $30,000 back and then how ever the trades work out. You may have to get out through another brokerage. It is bad and bad bussiness, but why do bussiness with them in the first place and not complaim untill things go wrong. At least their were some before things went wrong that said to stay away from them.