MF Global, a commodities brokerage firm that filed for Chapter 11 bankruptcy today, reportedly was brought down by highly risky bets on debt securities issued by European governments. Once regulators reportedly forced it to disclose the bets on debt issued by countries including Italy, Portugal and Spain, the firm rapidly unraveled with no buyers willing to step in.
MF Global’s bankrupty filing is reportedly the seventh-largest bankruptcy by assets in U.S. history.
Regulators had expressed “grave concerns” about the viability of MF Global, which filed for bankruptcy only after “no viable alternative was available in the limited time leading up to the regulators’ deadline,” the company’s COO, Bradley Abelow, said in a court filing. The Company’s board reportedly worked all weekend attempting to find a buyer for the firm, in an episode remniscent of the collapse of the former Lehman Brothers Holdings.
The bankruptcy filing let MF Global’s 2,870 employees, as well as trading counterparties, in limbo, and also reportedly disrupted trading in futures contracts on gold, crude oils and grains because MF Global customers and personnel were prevented from trading.
The value of MF Global’s stock and other securities has also plummeted in value.
Investors who believe that they bought MF Global securities (including a bond issue that occurred during August 2011) without being fully informed concerning MF Global’s business condition, risk profile and proprietary trading exposures may wish to consider consulting an attorney to explore whether they may have a viable claim. Investors may contact the Law Office of Christopher J. Gray, P.C. for a confidential, no-cost consultation.