Where does the business of MF Global come from?
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 focused on commodity futures trading.
When did MF Global have a liquidity problem?
On October 31, 2011, MF Global executives admitted that transfer of $700 million from customer accounts to the broker-dealer and a loan of $175 million in customer funds to MF Global’s U.K. subsidiary to cover (or mask) liquidity shortfalls at the company occurred on October 28, 2011. MF could not repay these monies with its own funds.
How did MF Global contribute to the financial crisis?
Many of these repo agreements were conducted off their balance sheet. Also, MF Global made a $6.3 billion investment on its own behalf in bonds of some of Europe’s most indebted nations. Failure of those, and other repo positions, contributed to the massive liquidity crisis at the firm.
Why did MF Global File for bankruptcy protection?
MF Global filed for bankruptcy protection because of heavy purchases of sovereign debt from some mired in the European Debt Crisis (including Ireland, Italy, Portugal, and Spain).
When did the MF Global bankruptcy report come out?
The House Financial Services Oversight and Investigations Subcommittee released its report on the MF Global bankruptcy on November 15, 2012.
Why was there so much pressure on MF Global?
A large part of these pressures on MF Global were a result of the firm’s involvement in a significant number of repurchase agreements. Many of these repo agreements were conducted off their balance sheet. Also, MF Global made a $6.3 billion investment on its own behalf in bonds of some of Europe’s most indebted nations.
How is customer money used in MF Global?
Customer funds are supposed to be segregated and invested, and firm money is to be used for the firm (payroll, debt payment, etc.). Instead, MF Global appears to commingle customer money into firm accounts to pay off the firm’s debts.