Bankruptcy, Mf Global | featured news

Jon Corzine's aggressive bets on European sovereign debt while head of the MF Global Holdings Ltd brokerage led to the firm's dramatic collapse in 2011, according to a report by the bankruptcy trustee.

Gabe Sherman argues that Dodd-Frank has already ended Wall Street as we know it. So how did MF Global go up in flames last year? The brokerage firm’s bankruptcy was mostly the outcome of failed, risky bets it placed through complex derivatives, and it lost an estimated $1.2 billion of its customers’ money in the process.

Investigators have determined what happened to nearly all of the customer money that disappeared from MF Global around the time of its bankruptcy last Oct. 31, but have not publicly disclosed their progress, fearing that doing so might cripple efforts to recover the cash and pursue potential wrongdoing, people briefed on the investigation said.

The amount of customer funds missing from accounts at the bankrupt brokerage MF Global “may be as much as $1.2 billion or more,” the trustee overseeing the firm’s liquidation said Monday. That would be roughly double previous estimates of about $600 million. In a statement, trustee James W. Giddens said the estimate is preliminary and “may well change.”

A U.S. futures regulator said on Tuesday that activity leading up to the bankruptcy of brokerage MF Global appears to be "either nefarious or illegal."

The 1,066-member workforce of MF Global Holdings Ltd's brokerage has been terminated, the latest aftershock to the parent company's $41 billion collapse nearly two weeks ago.

The discovery comes after days of intensifying regulatory scrutiny at MF Global, which filed for bankruptcy on Monday.

He set out to create a mini-Goldman Sachs. In the end, he built a mini-Lehman Brothers. Former New Jersey Gov. Jon Corzine's resignation Friday from the securities firm he led capped a week of high drama and swift failure. Less than a week ago, Corzine had expected to sell his firm, MF Global. By week's end, it had collapsed into bankruptcy. And Corzine had hired a criminal defense lawyer in the face of an investigation of the firm by the FBI and federal prosecutors.

The Federal Bureau of Investigation plans to examine MF Global Holdings Ltd amid concerns about missing client funds at the futures brokerage, the Wall Street Journal said Tuesday, citing a person familiar with the matter.

The Wall Street firm run by former Goldman Sachs Chairman and New Jersey Gov. Jon Corzine filed for bankruptcy Monday morning, making it the first big American casualty of the European debt crisis.