Looks like Obama's dirt runs deep
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.
Corzine is also a top fundraiser for President Barack Obama, having helped raise at least $500,000 for Obama’s re-election campaign since April, according to records released by the campaign.
It should be pointed out that since filing for bankruptcy, it has been reported that MF Global is being investigated for “hundred of millions” of missing dollars.
MF Global was also notable for being one of 22 companies considered “financially secure” enough to sell U.S. government debt on behalf of the Fed.
Why that conclusion was reached is unclear: MF Global turned a profit just three times in the past 12 quarters.
As the European debt crisis threatened to spread, investors and analysts focused on the company’s holdings of debt from Belgium, Italy, Spain, Portugal and Ireland.
And then they filed for bankruptcy.
As reported yesterday on The Blaze:
After attempting a fire sale over the weekend, MF Global (NYSE:MF), will file for Chapter 11 bankruptcy as soon as today and according to the Wall Street Journal, may sell the firm’s assets to Interactive Brokers Group (NASDAQ:IBKR) for $1 billion through a court-supervised auction.
The company has also been suspended from conducting business with the Federal Reserve Bank of New York.
Since then, and as predicted by Business Insider, the securities firm 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.
Allegedly, Corzine worked over the weekend to find a buyer but that an effort to sell the firm to Interactive Brokers Group of Greenwich, Conn., fell through, reports The Wall Street Journal.
MF Global filed its petition with the U.S. Bankruptcy Court for the Southern District of New York. Including its subsidiaries, MF Global has assets as $41.05 billion and liabilities of $39.68 billion, according to its bankruptcy petition, reports Fox News.
However, as mentioned earlier, the story has a twist: apparently, there are millions of dollars missing.
From Dealbook (h/t Business Insider):
Federal regulators have discovered that hundreds of millions of dollars in customer money [has] gone missing from MF Global in recent days, prompting an investigation into the company’s operations as it filed for bankruptcy on Monday, according to several people briefed on the matter.
“Evidently the missing money, perhaps up to $700 million, is what killed any chance of a deal for the company, and obviously the big fear is that somehow customer money got co-mingled with the firm’s money in some improper way as it attempted to stay alive,” writes Business Insider.
What happens when customers fear that their money is unavailable? Usually panic and that is never good for any market.
In a statement on Monday night, the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission said that regulators had been monitoring MF Global in anticipation of a transaction “that would include the transfer of customer accounts to another firm,” reports Reuters.
“Early this morning, MF Global informed the regulators that the transaction had not been agreed to and reported possible deficiencies in customer futures segregated accounts held at the firm,” the regulators’ statement said.
Tags: Company, Run, by, Obama, Fundraiser, Corzine, Bankruptcy, Feds, Investigate, $700 Million gone
Location: Washington, District of Columbia, United States (load item map)
Marked as: approved
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