MF Global Files for Bankruptcy
Trading in shares of broker-dealer MF Global was halted hours after the company filed for Chapter 11 bankruptcy protection today in New York. The financial derivatives brokerage firm was led by Jon Corzine, the former CEO of Goldman Sachs and governor of New Jersey.
Shares of the company closed Friday at $1.20, compared with a 52-week high of $9.28.
Its problems are mostly related to its exposure of $6 billion to European sovereign debt out of $41 billion in total assets, according to Janney Capital Markets. The company’s stock price declined more than two-thirds last week after Moody’s and Fitch downgraded the firm’s debt.
In August, the regulator, FINRA, instructed MF Global to boost its required net capital because of its exposure in Europe.
The company’s board had met this weekend in New York to consider its options, including a sale, according to Bloomberg.
Many financial analysts have expressed shock at the downfall of Corzine, who was governor from 2006 until Gov. Chris Christie defeated him in 2009.
Corzine’s purported plan was to turn MF Global into an investment bank.
In a July 2005, an article in New York Magazine described how Corzine had been ousted out of Goldman Sachs as the company made its initial public offering.
“Before he was pushed out as CEO of Goldman Sachs, Jon Corzine had never lost at anything, and his unassuming mien masks a deep hunger for redemption,” according to New York Magazine.