Eurozone crisis claims MF Global

MF Global became the largest US casualty of the eurozone crisis as it filed for bankruptcy protection after making big bets on the European sovereign debt market, the FT reports. The broker-dealer, run by Jon Corzine, an ex-chief executive of Goldman Sachs and a former New Jersey senator and governor, admitted defeat on Monday in its attempt to stay in business after an 11th-hour deal to sell itself to Interactive Brokers Group fell apart. It is the largest failure of a US financial firm since the collapse of Lehman Brothers in 2008. Several people close to the last-minute talks said due diligence raised questions about whether the firm’s commodities book was fully funded. They said the shortfall appeared to have been as much as several hundred million dollars. The Securities and Exchange Commission and the Commodity Futures Trading Commission said MF Global reported “possible deficiencies in customer futures segregated accounts held at the firm” as it told regulators a sale had fallen through.  According to Bloomberg, the firm listed debt of$39.7bn and assets of $41bn in Chapter 11 papers filed on Monday. For more on the nature of MF Global’s proprietary flavoured repo-to-maturity trades which initially spooked the market, see FT Alphaville.