MF Global Company Information
MF Global, the global financial derivatives broker, filed for bankruptcy in New York on October 31, 2011, as a result of the European sovereign debt issues.
The company, formerly known as Man Financial provided a variety of financial products, including futures and options, exchange-traded derivatives and contracts for differences, foreign exchange and spread betting.
The company dealt as a primary dealer in US Treasury securities as well. It filed for bankruptcy protection as a result of liquidity problems arising from the Eurodebt bonds.
MF Global served as the brokerage segment of Man Group. But in 2007, the business split the investment and brokerage businesses so they could each concentrate on their specific markets.
MF Global emerged from an IPO which was done for the brokerage business. The investment part of the business retained the name of the Man Group. Initially registered in Bermuda, the company subsequently registered and headquartered in the United States.
The company’s history began when Englishman James Man started it in England in 1783, as a sugar trader. It eventually began trading other commodities and transformed into a financial services firm during the 1980’s.
Its former parent, ED&F Man, expanded from pure cash commodities into commodity futures in the late 1970. It then established the Anderson Man futures brokerage in 1981.
The name evolved into ED&F Man International and then Man Financial, before it took on the current brand after the IPO and separation of the brokerage from the asset management operation.
ED&F Man was listed on the London Stock Exchange in 1994, and changed its name to Man Group in 2000. It sold its agricultural business, retaining the ED&F name, to management that year.
Like many financial services companies at the time, Man Financial engaged in a series of acquisitions, expanding its product capability and geographic reach. An early acquisition was the Chicago-based GNP Commodities in 1989.
Man Financial made its largest deal in 2005 with the $323 million acquisition of client assets and accounts from entities of Refco, following the U.S. financial-services group's collapse in late 2005.
On March 17, 2008, shares of MF Global plummeted on liquidity fears. However, The CME, ICE, Nymex and CFTC issued statements stating MF Global was in compliance with regulatory and financial requirements.
The first sign of its recent troubles began on October 25, 2011 when MF Global reported a $191.6 million quarterly loss as a result of trading on European government bonds.
Moody's and Fitch promptly cut the company's credit rankings to junk. Reports emerged showing that Jon Corzine, the former New Jersey governor who led MF Global, was trying to find a buyer.
Chaos erupted as the firm was halted from doing new business with the New York Fed until it showed it was able to fulfill its responsibilities as a primary dealer.
Trading in MF Global's stock was halted. On Monday October 31, 2011, the company filed for Chapter 11 bankruptcy.
The Wall Street Journal wrote that MF Global would seek Chapter 11 bankruptcy protection after investing in excess of $6 billion in sovereign bonds issued by European countries.
According to the CME Group Inc., MF Global didn’t follow rules on keeping customer money separate from its own trading accounts.
On August 31, 2011 MF Global had $7.3 billion in customer assets, according to Commodity Futures Trading Commission, the government agency charged with investigating its business practices.
MF Global’s bankruptcy market the largest Wall Street firm collapse since the Lehman Brothers in September 2008. In papers filed in U.S. Bankruptcy Court in Manhattan, MF Global listed debt of $39.7 billion and assets of $41 billion.
U.S. regulators have subpoenaed MF Global’s auditor, PricewaterhouseCoopers LLP, for information on the segregation of assets belonging to clients trading on U.S. commodity exchanges .
Regulators are searching for over $600 million that may be missing from client accounts. The U.S. Securities and Exchange Commission (SEC) is also looking into trades in MF Global Holdings Ltd. (MF) convertible bonds to ascertain whether some investors sold the debt based on confidential information before the firm’s demise.
CEO Corzine and the board were soundly criticized by the financial press for their seeming non-awareness of the company's condition in the immediate lead-up to the bankruptcy and their inability to manage MF Global’s losses and risk.
Lost money from MF Global's collapse? We may be able to help get your money back.
If you invested in MF Global Bonds or any other MF Global product, please complete the form on this page or call Attorney Bill Kyros or George Pressly at 1-800-934-2921 to discuss your rights.