Bank of New York Mellon should be ordered to return about $337 million to Sentinel Management Group Inc, a U.S. futures broker that went bankrupt in 2007, according to a court filing made by the bankruptcy trustee, Reuters reported today. Sentinel's bankruptcy trustee, Frederick Grede, alleged that the futures broker pledged hundreds of millions of dollars in customer assets to secure an overnight loan from Bank of New York Mellon, leaving the bank in a secured position but Sentinel's customers with losses worth millions. Sentinel largely managed money for other futures brokers, who are required to keep customers' funds in dedicated accounts to protect them from being used for anything other than client business. However, at Sentinel, customer funds were allegedly moved from the protected accounts to other accounts so that they could be used as collateral for a loan from Bank of New York Mellon.
