MF Global files for bankruptcy

The securities firm led by Jon Corzine has plunged in value since making bad bets in Europe.

By Kim Peterson Oct 31, 2011 10:59AM

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.

5Comments
Oct 31, 2011 2:28PM
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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.

Oct 31, 2011 6:39PM
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As a person who "leans to the right", I realize I'm supposed to be on the side of business.  But what really pisses me off is how these executives will run a company into the ground; put thousands of people out of work, lose millions of people's retirements and investments but the executives.......mos​t of them have already lined up a new position on another board drawing a seven figure salary.  You would think these companies would stop hiring people that have ruined other companies.  But I guess this way, when their company goes down , they can get hired on by one of their buddies at another company.
Nov 1, 2011 7:49AM
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Mr. Corzine is no longer an employee of Goldman Sachs.
 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.

Oct 31, 2011 3:35PM
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It's how he ran New Jersey.  Why is this news.  This is how the demoRAT's operate.
Oct 31, 2011 5:28PM
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Can you believe my broker told me that MF would probably be recapitalized, or bought out. Too big to fail. So on Friday 10/28/11, my broker advised me to buy MF<@ 1.40 p/s. I would like to know, is this broker looking out for me, or am I a patsy. Personally I feel abused. Please let me know what you think. Except for the guy who always curses and spouts,  this is because of the Dems. or REP. Dude your opinion is NOT of value at my house. I don't care who's to blame in the gov., just who I am doing business with!
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