MF Global files for bankruptcy
The securities firm led by Jon Corzine has plunged in value since making bad bets in Europe.
A securities firm run by former New Jersey Gov. Jon Corzine filed for bankruptcy protection Monday, brought down by risky bets in Europe.
Trading in shares of MF Global (MF) has been halted as the company scrambles to figure out its future. Corzine was trying to find a buyer over the weekend, reports say.
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The woes of MF Global show that the United States is not immune to the crisis in Europe. MF Global made huge investments in bonds issued by European countries -- a risky position that crashed as a sovereign debt disaster unfolded throughout the continent.
Shares of MF Global were about $30 several years ago. Monday, shares were halted at $1.20. The firm had two downgrades of its credit rating to junk status.
Corzine, a former chief executive of Goldman Sachs (GS), has the chops to put together a deal but hasn't said anything publicly lately. The Wall Street Journal has reported that Goldman is one of a handful of companies looking at bidding for all or parts of the company.
The latest plan will have MF Global's holding company file for bankruptcy and its assets sold to Interactive Brokers Group (IBKR).
Clients are dropping like flies. Corzine is under immense pressure to get a deal done fast.
"Management needs to move quickly in order to avoid client defections and either work on strategic options or work with the (ratings) agencies to get back to stable status," Deutsche Bank analyst Michael Carrier wrote in a note to clients.
Corzine became the chief executive of MF Global in March 2010 and has been aggressively ramping up the company from a traditional securities firm into one that makes bets with its own capital, Reuters reports.
But making big money means taking on big risk, and that didn't play out well this time around.
I hope everyone notices that the description "Democrat" did not appear in this report.
It is not important that the former Democrat Senator from NJ and former Democrat Governor of NJ, who left his state with an 8 billion dollar deficit, was and is a Democrat.
It's not important or worth noting at all.
In fact, such a description might be used to draw inferences against the Democrat Party, and there is no need to engage in such gratuitous slander.
No, sir. Let's not go there.
He should have understood that as a former employee he cannot use the US Treasury as his personal slush fund.
Only current employees of Goldman Sachs are entitled to have their bets insured by the American Taxpayer.
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Stocks drift lower and bonds are hit as investors await the Fed. Prepare for higher volatility this week.
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