Business News
US bank files for bankruptcy after betting on EU debt
Oct 31, 2011, 17:55 GMT
New York - MF Global Holdings Ltd, a broker-dealer firm, and its finance unit, MF Global Finance USA, Monday filed for reorganization under US bankruptcy law after losing its bets on European sovereign debt.
The MF Global Holdings bankruptcy is the first large victim on Wall Street of the roiling euro debt crisis. In Europe earlier in October, the Belgian-Franco-Luxembourg bank Dexia sought rescue by the Belgian government, pending final clearance from European Union antitrust regulators.
In its filing for Chapter 11 bankruptcy, MF Global listed total debt of 39.7 billion dollars and assets of 41 billion dollars. The finance unit listed debt of 50 million dollars and assets of 500 million dollars.
MF Global is largely unknown in the public, but well known in the financial world as a player. The brokerage house works closely with hedge funds in developing their business with currency trading, derivatives and raw materials.
The firm had bought bonds from Spain, Ireland, Portugal and Italy in the belief that the eurozone would quickly recover from its debt crisis. MF Global recently said it had invested 6.3 billion dollars in its European debt portfolio.
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