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| === Bankruptcy protection === | === Bankruptcy protection === | ||
| On October 25, 2011 MF Global reported a $191.6 million quarterly loss as a result of trading on European government bonds, in response ] and ] cut the |
On October 25, 2011 MF Global reported a $191.6 million quarterly loss as a result of trading on European government bonds, in response ] and ] cut the company's credit rankings to junk. ], the former New Jersey governor who led MF Global, was working to find a buyer, according to several reports.<ref>{{cite news|url=http://www.bloomberg.com/news/2011-10-30/corzine-s-mf-global-faces-pivotal-days-as-firm-considers-sale-bankruptcy.html | title=MF Global Faces Pivotal Days as Firm Mulls Sale | publisher=Bloomberg}}</ref> | ||
| The firm’s board met through the weekend of October 29/30 in New York to consider options including a sale to avert failure, according to a person with direct knowledge of the situation. It was stopped from doing new business with the New York Fed until it showed it was able to fulfill its responsibilities as a primary dealer, according to a statement on the regulator’s website. Trading in MF Global’s stock was halted. | The firm’s board met through the weekend of October 29/30 in New York to consider options including a sale to avert failure, according to a person with direct knowledge of the situation. It was stopped from doing new business with the New York Fed until it showed it was able to fulfill its responsibilities as a primary dealer, according to a statement on the regulator’s website. Trading in MF Global’s stock was halted. | ||
Revision as of 02:40, 1 November 2011
| File:MFGlobal-logo.gif | |
| Company type | Public Company |
|---|---|
| Traded as | NYSE: MF |
| Industry | Financial Services |
| Founded | 2007 (2007) |
| Founder | Man Group |
| Headquarters | New York, United States |
| Key people | Jon Corzine, CEO (Since Mar 2010) |
| Services | Financial broker, On-line trading, Futures, Options, CFDs, Spread Betting |
| Total assets |  $42.460 billion (2010) |
| Total equity | $1.490 billion (2010) |
| Number of employees | 3,271 |
| Website | http://www.mfglobal.com |
MF Global (NYSE: MF), formerly known as Man Financial, is a major global financial derivatives broker. MF Global provides exchange-traded derivatives such as futures and options as well as over-the-counter products such as contracts for difference (CFDs), foreign exchange and spread betting. MF Global was also a primary dealer in US Treasury securities, until terminated on 31 Oct 2011 after filing for bankruptcy protection.
MF Global was the brokerage segment of Man Group until 2007, when the business decided to split the investment and brokerage businesses so they could each focus on their own markets. An IPO was done for the brokerage business which was renamed MF Global to distinguish it from the investment business which remained as Man Group. The company was registered in Bermuda but subsequently moved its registration and headquarters to the United States.
History
MF Global traces its roots to the sugar trading business started by James Man in England in 1783, which evolved into broader commodities trading before its later transformation into a financial services business during the 1980s.
Its former parent, then known as ED&F Man, diversified from pure cash commodities into commodity futures in the late 1970s, and established the Anderson Man futures brokerage in 1981. It later changed its name to ED&F Man International and then Man Financial, before adopting the current brand following the IPO and separation of the brokerage from the asset management operation.
ED&F Man operated as a partnership through to the 1970s, when it started an international expansion which, by 1983, saw its staff climb to 650 employees. ED&F Man listed on the London Stock Exchange in 1994, changing its name to Man Group in 2000. Its agricultural business, which retained the EDF Man name, was sold to management the same year.
The rapid expansion of the Man Investments unit in the emerging hedge fund management business shrouded many investors from the development of its brokerage unit.
Man Financial embarked on a series of acquisitions, which expanded its product capability and geographic reach, starting in 1989 with the purchase of the Chicago-based GNP Commodities, and including well-known industry names such as Geldermann, Gerald Metals, Tullett & Tokyo Futures, First American Discount Corp., Australia’s Ord Minnett and GNI.
The 2002 purchase of GNI was the largest of these and gave Man Financial access to the then growing Contract for difference market and GNIs trading platform GNI touch.
However, 2005 saw Man Financial make its largest deal with the transformative $323 million acquisition of client assets and accounts from entities of Refco following the U.S. financial-services group’s collapse in late 2005. The Refco deal followed a hotly-contested auction with Cerberus Capital, the private equity group, and boosted Man Financial’s scale in retail and institutional business.
On March 17, 2008, shares of MF Global plummeted on liquidity fears.. The CME, ICE, Nymex and CFTC issued statements confirming MF Global was in compliance with regulatory and financial requirements.
Bankruptcy protection
On October 25, 2011 MF Global reported a $191.6 million quarterly loss as a result of trading on European government bonds, in response Moody’s and Fitch cut the company's credit rankings to junk. Jon Corzine, the former New Jersey governor who led MF Global, was working to find a buyer, according to several reports.
The firm’s board met through the weekend of October 29/30 in New York to consider options including a sale to avert failure, according to a person with direct knowledge of the situation. It was stopped from doing new business with the New York Fed until it showed it was able to fulfill its responsibilities as a primary dealer, according to a statement on the regulator’s website. Trading in MF Global’s stock was halted.
On October 31, 2011 MF Global filed for bankruptcy protection. The Wall Street Journal reported that MF Global would seek Chapter 11 bankruptcy protection after investing $6 billion in sovereign bonds issued by European countries.
Issues
On Feb. 28, 2008, MF Global announced a bad debt provision in the amount of $141.5 million. The provision was the result of unauthorised trading by a representative in a MF Global branch office, who on Feb. 27 of 2008, while trading in the wheat futures market in his personal account, substantially exceeded his authorized trading limit. MF Global held a conference call at 11 a.m. EST on Feb. 28 to discuss the matter.
MF Global was fined $10,000,000 by the CFTC over the incident and an unrelated Natural Gas incident from 2003. The CME Group also fined MF Global $495,000 over the wheat incident.
On 31st October 2011, shares of MF Global were suspended in pre-trading and the firm filed for Chapter 11 bankruptcy.
References
- LinkedIn Companies MF Global
- "New York Fed Severs Tie With Bankrupt MF Global, Down To 21 Primary Dealers". Forbes.
- "MarketsWiki - MF Global Holdings Ltd".
- "Man oh Man!".
{{cite web}}: Unknown parameter|org=ignored (help) - "Man Group wins Refco auction".
{{cite web}}: Unknown parameter|org=ignored (help) - "MF Global plunges amid liquidity fears".
{{cite web}}: Unknown parameter|org=ignored (help) - "CME Group Statement on MF Global in Good Standing at CME Clearing".
{{cite web}}: Unknown parameter|org=ignored (help) - "ICE Confirms MF Global Remains in Good Standing". March 18, 2008.
{{cite web}}: Unknown parameter|org=ignored (help) - "NYMEX Holdings, Inc. Statement Regarding Its Clearing Members and Financial Safeguards".
{{cite web}}: Unknown parameter|org=ignored (help) - "CFTC Statement on MF Global".
{{cite web}}: Unknown parameter|org=ignored (help) - "MF Global Faces Pivotal Days as Firm Mulls Sale". Bloomberg.
- "MF Global Files for Bankruptcy After Bad Bets on European Debt". Bloomberg Businessweek. October 31, 2011.
- "MF Global Announces $141.5 Million Bad Debt Provision". MF Global. February 28, 2008.
- "Conference Call".
{{cite web}}: Unknown parameter|org=ignored (help) - "CFTC Sanctions MF Global Inc. $10 Million for Significant Supervision Violations between 2003 and 2008". Commodity Futures Trading Commission. December 25, 2009.
- "MF Global faces $10m CFTC fine".
{{cite web}}: Unknown parameter|org=ignored (help) - "CME Fines MF Global $495,000 Over Rogue Wheat Trades". Nasdaq.
- Spicer, Jonathan (October 31, 2011). "MF Global files for bankruptcy after deal unravels". Reuters. Thomson Reuters. Retrieved October 31, 2011.