The court-appointed trustee overseeing MF Global's bankruptcy says up to $1.2 billion is missing from customer accounts -- or double what the firm had reported to regulators last month.

The revelation by James Giddens, who is overseeing the unwinding of the securities firm formerly run by Jon Corzine, raised the stakes in a widening regulatory and legal hunt for the missing money and the circumstances of the firm's collapse into bankruptcy three weeks ago, the Wall Street Journal reports.

The jump from the original estimate of a $600 million shortfall also cast deeper doubt about the ability of the bankruptcy trustee to make former MF Global customers whole anytime soon, or perhaps ever, the newspaper reports.

Giddens also said in a statement Monday that his plans to release about $520 million from accounts that have been frozen will mean nearly all the assets under his control will be distributed. Giddens has been combing through the accounts and finances of MF Global, which filed for bankruptcy protection on Oct. 31.

In a statement, Giddens's office said "the apparent shortfall" was as much as $1.2 billion or more, but noted that the figure could change.

Regulators are now probing whether MF Global tapped money from clients' accounts as its own financial condition worsened, a violation of securities rules. The FBI is also investigating whether New York-based MF Global violated any criminal laws. The firm collapsed after making a disastrous bet on European debt.

The outcome "will all depend on how much more property the trustee can identify and get under control," Giddens' spokesman Kent Jarrell told the Wall Street Journal. Jarrell said the trustee remains committed to his goal of returning 100 percent of customer money.

Monday's development was a blow to customers still hoping to get more of their cash out of frozen broker accounts and raised questions about why authorities managed to locate only about 60 percent of the segregated customer funds three weeks after the parent firm's bankruptcy, Reuters reports.

Tom Ward, a retired Chicago Board of Trade member whose two sons cleared their futures trades through MF Global and have been blocked from accessing their money, told Reuters he was "flabbergasted" by the news.

"The bottom line is, there's going to be a haircut involved," Ward told Reuters. "It's devastating, what this has done to the industry."

The Associated Press contributed to this report.