MF Global files for bankruptcy protection

 
City A.M. Reporter
MF Global, the troubled US broker-dealer run by former Goldman Sachs chief Jon Corzine, has filed for Chapter 11 bankruptcy after a tentative deal with a buyer fell apart.

The firm's meltdown in less than a week following big bets on Eurozone debt is a stunning setback for Corzine, who sought to turn MF Global into a mini-Goldman after losing his governorship of New Jersey after an election.

The bankruptcy filing came after talks to sell a variety of assets to Interactive Brokers broke down, a person familiar with the matter said.

Hours earlier, central banks and exchanges had slapped the broker with suspensions.
Markets worldwide have started to feel the impact.

Three traders wearing MF Global jackets were seen leaving the Chicago Board of Trade prior to the opening of pit trading, and floor sources told Reuters they had been turned away after their security access cards were denied. They declined to comment.

MF Global Finance USA also filed for Chapter 11 protection, court records show.

Both MF Global entities filed for protection from creditors with the US bankruptcy court in Manhattan.

MF Global scrambled through the weekend and into Monday to find buyers for all or parts of the company, while at the same time hiring restructuring and bankruptcy advisers in case nothing could be done.

The company, which under Corzine ramped up more risky proprietary trading, is suffering because of low interest rates and bets it made on European sovereign debt, making it possibly the most prominent US casualty yet from the Eurozone debt crisis.

Its shares remained halted in New York.