MF Global Files for Bankruptcy Protection
MF Global Holdings Ltd., the securities firm run by former New Jersey Governor and Goldman Sachs head Jon Corzine, is seeking bankruptcy protection one week after reporting its biggest-ever quarterly loss.
MF Global shares plunged 66 percent last week. Besides the loss of $186.6 million for the fiscal second quarter, investors were spooked when MF Global’s debt was downgraded to junk status.
Credit-rating agencies expressed concern about the firm’s $6 billion portfolio of European debt.
MF Global appears to be the first major U.S. casualty of Europe’s debt crisis, although last week it sought to reassure investors that the investment in European sovereign debt was prudent. It blamed the big loss on weaker-than-expected trading revenue and one-time costs.