MF Global hires bankruptcy lawyers: "...prepare for a possible bankruptcy filing"

Marketwatch citing WSJ

MF Global Holdings Ltd. has engaged attorneys tp prepare for a possible bankruptcy filing or other restructuring if it is unable to sell all or part of its broker-dealer, The Wall Street Journal reported Sunday, citing unidentified people familiar with the matter. The financial firm has hired law firms Skadden, Arps, Slate, Meagher & Flom and Weil, Gotshal & Manges "to prepare potential restructuring options," the report said. MF Global ended with a 16.1% loss on Friday, having lost 85.7% of its value so far this year, as investors worry about the firm's exposure to Europe.

So is this big news? Would this bankruptcy filing have any further impacts on the financial or banking sector?

This is HUGE actually.

Important information you must consider here :

MF Global Holdings Ltd, formerly known as MF Global Inc., formerly known as Man Financial,[1] is one of the world's largest derivatives brokers with a significant presence in OTC products and cash securities. The Bermuda-registered group was rebranded and spun off from Man Group in July 2007 through an initial public offering (IPO) which valued the company at $3.63 billion.[2] It changed its name to MF Global Holdings Ltd in January 2010, when it moved its headquarters to Delaware.[3]

As of 2008, MF Global was the world's largest futures retail broker, with over 138,000[5] active client accounts. It has grown organically and through 18 acquisitions since 1989, including its 2005 purchase of client accounts and other assets from Refco.

The company has a global footprint through offices in New York and Chicago, Bermuda, Toronto, London, Paris, Mumbai, Singapore, Sydney, Taipei, Tokyo, Hong Kong and Dubai. It operates on more than 70 exchanges,[6][7] and is the largest single broker on most of the leading platforms including the CME and Eurex.

If they go under this will create a huge shift in the economic landscape in my assessment.

Oh and here is my source :
marketswiki - MF Global Holdings Ltd

This corporation is a huge player, that's for sure.

Wow hey.

ZH has stated that this has triggered a USDJPY soaring over 250 pips which has prompted Japan to urgently intervene in their currency.

The Japanese intervention is also breaking news on Reuters.

Oh-oh... this is how these things start. Quiet isolated implosions. This feels really bad.

Japan intervenes in forex market; yen dives

Japan intervened in the foreign-exchange market Monday, sending the U.S. dollar and the euro climbing sharply against the Japanese yen.

The dollar /quotes/zigman/4868099/sampled USDJPY +3.7035% surged against the yen, buying ¥78.42 compared to ¥75.77 in early Monday morning trade.

The euro /quotes/zigman/4868097/sampled EURJPY +3.2367% also jumped against the yen, buying ¥110.67, compared to ¥107.24 in late North American trade Friday.

How does such intervention result in such a rapid and dramatic currency devaluation?

The dollar hit a fresh record low against the yen earlier Monday, and Japanese Finance Minister Jun Azumi said that the country would take decisive steps to stem the currency’s rise if required, but didn’t provide specific details, according to reports from the region.

As is often said, the devil is in the 'details'.

reply to post by surrealist


Wow thank you for the information about the Japanese Yen and the crisis ongoing.

I will continue reading and post anything important I may find.

Let's keep this thread going folks, this is really important.

Why would the japanese weaken the yen?

Would it not be more benificial for its people to have a stronger currency.....

reply to post by michaelmcclen


A stronger currency has adverse effects on the local economy. It makes exports cost more in global trading. Lowering the currency, in this case the Japanese lowering the Yen, ensures the shopers from overseas do not pay more for Japanese goods. Hence why you can get currency wars.

MF (Common Stock)
Stock chart for: 03NA000000MF

Previous Close 1.43
Price 1.20
Change - 0.23
% Change 16.08%
Volume 84,668,336
Today's Open 1.02
Intraday High 1.48
Intraday Low 0.99
52 Week Low 1.07
52 Week High 9.28


MF sure needs to go defunct... just look at the decline in the last year
$9.28 price declines to today's low of .99¢.... that translates to a big 99% loser

reply to post by St Udio


Let me guess, the TV will soon be saying MF is 'too big to fail' and we need to bail them out?

I mean who else is going to eat those derivatives?

The Fed is backing 75 trillion if BoA derivatives and 79 trillion From JP Morgan. If one bank can pawn off their debt they all can. This is a scary fact considering the derivatives market is valued between 600 trillion and 1.5 quadrillion!

It is a common place when bank stocks hit 1 or 2 dollars they are forced into bankruptcy by other banking CEO's so they can be bought up. The debt will again be shouldered by the public, and the purchasing bank will obtain new assets at a 99% discount.

It's only a matter of time until all banks can restructure their balance sheets and pass their derivatives off to the public.

Yup, if the derivatives game starts flushing down the toilet across the board, the impact will be massively disasterous to say the least.

It will be at that point the public will finally wake up to just how much "money" across the globe in the banking/stock market industry has actually been nothing but a bunch of fudged numbers on a computer screen.

This certainly has the potential to be the start of something huge.

Don't worry guys, the Fed has some backstop scheme in place. The derivative market is a huge top-heavy house of cards and seeing how the Fed and the government reacted to AIG, some scheme will develop to put the risk and loss on the taxpayer.

reply to post by surrealist


Massive corporation run by an ex American politician HQ'd in the Caribbean ... ahh .. if that doesn't just make you smile.

They won't go belly up.. they will likely fragment the corporation and have a fire sale to various parties. Bloomberg is quoting their "problems" originate with "bets on European debt"

Pressure is mounting on Corzine, the former governor of New Jersey and U.S. senator, after MF Global declined 67 percent last week and its bonds started trading at distressed levels amid its disclosures of bets on European sovereign-debt.

www.bloomberg.com...

Which, to me, makes absolutely no sense at all considering no nation has yet defaulted.. not even Greece, it's still just an idea in the making? But assuming they loose 50%+ of their capital in Greek debts, there is no way that would be big enough to bring down such a massive corporation.

MF Global, which has a market value of $198 million, owns $6.3 billion of Italian, Spanish, Belgian, Portuguese and Irish debt, the company said in an Oct. 25 presentation.

Clearly they have ... other issues besides sovereign debt ownership? Don't even own any Greek debt! I hate when news sites write half-arse stories..

reply to post by Vikus


That I disagree with, the US Government will not save a Broker .. especially one that is not based in the United States.

Wanted to add this:

MF Bonds Dive as Broker Drawing on Credit Lines Cut to Junk

Oct. 28 (Bloomberg) -- Oct. 28 (Bloomberg) -- Bonds of MF Global Holdings Ltd. declined to as low as 35 cents on the dollar after the futures broker run by Jon Corzine drew on its credit lines and Moody’s Investors Service and Fitch Ratings cut the firm’s ratings to junk.

The company’s $325 million of 6.25 percent bonds, issued at par in August, fell 11.9 cents to 50 cents on the dollar as of 5:17 p.m. in New York, for a yield of 25.2 percent, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority...

MF Global is in discussions with five potential buyers for all or parts of the company, according to a person with knowledge of the matter. Banks, private-equity firms and brokers are examining the firm’s books, said the person, who asked not to be identified because the talks are private.

Much more in the link.

Bloomberg

MF Global near deal for bankruptcy, asset sale:WSJ

MF Global Holdings Ltd. was nearing a deal late Sunday to sell off assets to Interactive Brokers Group and file for bankruptcy protection as soon as Monday, The Wall Street Journal reported, citing an unnamed person familiar with the matter. The tentative deal would involve a Chapter 11 filing followed by Interactive Brokers making an initial bid of about $1 billion via a court-supervised auction, the report said. It said that both companies' boards of directors have approved the plan, hammered out by MF Global Chief Executive Jon Corzine, who previously served as governor of New Jersey and chief of Goldman Sachs Group Inc.

reply to post by Rockpuck


And a former CEO of Goldman Sachs. ALL HAIL GS!!!

Broker-dealer MF Global files for bankruptcy


NEW YORK (AP) – Broker-dealer MF Global, headed by former New Jersey governor and Goldman Sachs chairman John Corzine, has filed for bankruptcy protection, apparently because of holdings of European debt.

Link to Full Story

How Jon Corzine Bankrupted His Firm.

A risky management style and a series of bad bets have brought MF Global, the financial derivatives broker led by former New Jersey Senator and Goldman Sachs CEO Jon Corzine, to the brink of collapse. On Monday morning, the New York Fed blocked MF Global from doing business with the central bank as the firm looks for a buyer in a deal that will likely entail bankruptcy and the end of Corzine's tenure at the firm, report The Wall Street Journal and Financial Times. It's a bitter fall from grace for Corzine, who returned to Wall Street after losing the New Jersey governorship to Chris Christie in 2009 following a corruption scandal. Here's how his plan to turn MF Global into a "mini Goldman" ended up bringing the company down:

Full Story