Corzine’s MF Global files for bankruptcy

Sinn Fein

Infidel and White Interloper
Wackbag Staff
Aug 29, 2002
31,566
2,215
898
Florida's Nature Coast
#1
Corzine’s MF Global files for bankruptcy

Besieged broker MF Global filed bankruptcy today after a frantic effort over the weekend by CEO Jon Corzine to strike an out-of-bankruptcy sale came up short.
MF Global had a tentative deal to sell assets to Interactive Brokers Group as of late Sunday, but the agreement fell apart as talks continued overnight, people familiar with the matter said. Discussions ended around 5 a.m. Eastern Time, one of these people said.
MF Global had been considering filing just its holding company for bankruptcy protection and then executing the sale. That plan is now off the table, one of the people said. This person said MF Global's parent company would be included in the bankruptcy filing.

Voluntary bankruptcy petitions for MF Global Holdings Ltd. and MF Global Finance USA Inc. hit the docket in a US bankruptcy court in Manhattan mid-morning Monday.
The New York Federal Reserve said that it suspended new business with the futures trading company until it establishes that it is "fully capable" of performing its duties as a primary broker. It is one of 22 primary brokers at the New York Fed.
Additionally, the InterContinental Exchange limited MF Global customers to unwinding positions and said it will no longer recognize the company or its divisions as a guarantor. MF Global is a major player in the futures markets, so the news had an outsized effect on futures trading.
In its bankruptcy filing with the Federal Bankruptcy Court in Manhattan, it listed JPMorgan Chase and Deutsche Bank as its biggest creditors.
The company reported a quarterly loss of $192 million last week and has seen its shares plunge more than 60 percent since then.
The bankruptcy ended one of the most harrowing weekends on Wall Street since Lehman Brothers on Sept. 15, 2008 imploded on worries that it was choking on toxic mortgage debt.
Three years later, Corzine — a former Goldman Sachs CEO — was pounding the phones this past weekend in an attempt to secure a white knight to purchase all or parts of MF Global after concerns about the broker-dealer’s exposures to some $6.3 billion in European sovereign debt decimated its shares in a wild week off trader for the firm that saw it lose three-quarters of its equity value.
For Corzine, 64, the bankruptcy is another knock on his reputation after choosing to dial up European risk at MF Global when other larger firms had grown weary.
Corzine is not expected to stay on at MF Global — an embarrassing outcome for a Wall Street titan who led Goldman Sachs before being ousted in 1999.
Corzine had hoped to strike a deal with a number of firms, including Barclays Capital, Goldman Sachs, Australian financial institution Macquarie Group and others, to purchase all or parts of the firm, sources noted.
However, few of the firms appeared willing to embrace fresh risk given the markets jitteriness around Europe and regulators weren't keen either, sources say.
Even during the firm’s hectic weekend shotgun deal making, Corzine held out that his bets on Europe only needed time to bear fruit and believes that the market worries around the broker dealers is overblown.
The heat on Corzine’s firm came to a head after the firm reported a record loss on Sept. 26 followed by a series of downgrades from major rating agencies Moody’s Investors Service and Fitch took its debt down to junk-bond levels the following day.
I love how they fail to mention that he's the former Governor of New Jersey.
 

ruckstande

Posts mostly from the shitter.
Apr 2, 2005
15,254
4,692
693
South Jersey
#2
New Jersey is thankful he's done ruining it's cauffers.
 

Begbie

Wackbag Generalissimo
Jul 21, 2003
17,997
5,390
838
Wilmington, NC
#4
Jeez, that's fuckin bad...

MF Global Trustee Says Shortfall Could Reach $1.2B

The court-appointed trustee overseeing the liquidation of MF Global’s brokerage now estimates that the shortfall in the firm’s customer funds could be more than $1.2 billion, double previous estimates.

Regulators currently suspect that MF Global improperly used customer money for its own purposes in the days before filing for Chapter 11 protection, according to people briefed on the matter.

The decision to release the updated figure on Monday came after authorities concluded that much of the customer money had left the firm, these people said.

By MF Global’s estimates to regulators, roughly $600 million in customer money was missing. But as forensic accountants pored over MF Global’s books in recent weeks, they began to question those estimates.

By Sunday, the accountants from Deloitte and Ernst & Young had discovered an even larger gap in customer funds.

The trustee, James W. Giddens, held a four-hour conference call on Sunday evening with staffers in New York City and Chicago before deciding to publicly reveal the new number, according to a spokesman, Kent Jarrell. Officials from the Commodity Futures Trading Commission and the CME Group, MF Global’s primary exchange, were consulted on Sunday night.

It is unclear what is behind MF Global’s prior, substantially lower estimates. The matter is being investigated by Mr. Giddens and a collection of federal authorities, including the Justice Department.

Authorities are still searching for the money, and are considering two possibilities. One is that MF Global used the money to meet trading partners’ demands for extra cash, which could come back. The other is that it was used to cover trading losses, which would be unrecoverable.

A spokeswoman for MF Global declined to comment.

Separately, Mr. Giddens’s office said it had already distributed about $1.5 billion in customer funds meant to support trading positions, and that $520 million in additional cash would soon be paid out.

The trustee’s office still controls about $1.6 billion in customer funds, most of which could be distributed early next month.

Beyond the shortfall in customer accounts, Mr. Giddens’s office said it did not have access to money that was held in foreign subsidiaries of MF Global, which are under the control of bankruptcy trustees in those countries.

“While the trustee will pursue them vigorously, it has been his experience that recovery of these foreign assets may take more time,” the office said.
 

CousinDave

Registered User
Dec 11, 2007
25,297
198
393
Ohio
#5
I wonder why Barry didn't give his bag man a bailout on this one ?