MF Global suspended from trading
Monday 31 October 2011
The New York Fed suspended MF Global from conducting new business with the central bank today and its shares were suspended, as the troubled brokerage nears a deal on its future.
As per a tentative plan, MF Global's holding company would file for bankruptcy protection and derivatives trader Interactive Brokers would buy the assets, the Wall Street Journal and the Financial Times reported.
"The Federal Reserve Bank of New York has informed MF Global that it has been suspended from conducting new business with the New York Fed," the Fed said.
"This suspension will continue until MF Global establishes, to the satisfaction of the New York Fed, that MF Global is fully capable of discharging the responsibilities set out in the New York Fed's policy."
MF Global, run by former Goldman Sachs Chief Executive Jon Corzine, has been struggling over the past week in which it posted a quarterly loss, its shares fell by two-thirds and its credit ratings were cut to junk.
Its shares were suspended before trading opened in New York, pending a statement.
Interactive Brokers would likely make an initial bid of about $1 billion during a court supervised auction for the US futures brokerage, the WSJ said.
MF Global clients in London said the company wasn't taking on new business and they were closing out positions.
"It was quite difficult to get our money out on Friday, because they had a lot of redemption calls," a trader, whose firm used MF Global as a brokerage said.
"The company is not initiating any new position. They are trying to close down positions that they already have with clients that are open," the trader said.
The company is suffering because of low interest rates and bets it made on European sovereign debt, making it possibly the most prominent US casualty yet from the eurozone debt crisis.
MF Global was in talks yesterday with possible buyers, aiming "squarely" to do a deal, though all options remained on the table as the firm hired restructuring and bankruptcy advisers, sources familiar with the situation told Reuters.
The New York Times reported in its electronic edition that by yesterday evening, the talks had narrowed to one bidder, Interactive Brokers.
Sullivan & Cromwell's restructuring and mergers teams have joined the long roster of those advising MF Global, one source familiar with the situation said.
Weil, Gotshal & Manges was also hired to prepare potential restructuring options, a second source familiar with the situation said. The sources could not be identified by name because the talks were not public.
Weil would focus on MF Global's UK subsidiary if it needed to pursue a formal restructuring overseas, the Journal reported in its electronic edition.
The securities company also has hired firms Skadden, Arps, Slate, Meagher & Flom, the newspaper said.
MF Global and Interactive Brokers declined to comment. The law firms could not be reached immediately for comment.
A number of interested parties were considering several possible deals, including buying all or parts of MF Global, said the source, who requested anonymity.
"The goal is squarely for some sort of M&A transaction," the source said, adding the situation was "fluid."
auctionThe first 23 lots have now gone. But there are 22 more still up for grabs
healthJames Bond's alcohol consumption puts him at 'high risk' of cirrhosis, tremors... and impotence
musicPolice chief rejects rappers' claims that his work is as dangerous as law enforcement or military service
comedy'Fresh Meat' star sees off stiff competition from Alan Carr, David Mitchell, Graham Norton, Lee Mack and Sarah Millican to win top prize
tvSpoiler alert: Find out the result of a heated final show
Beatles rush out 'bootleg' album to defy EU copyright law
Harvey Weinstein reveals his secret weapon on-set
Now that an oil trader's drinking has got him sacked, will we all have to make do with an afternoon latte?
Chiwetel Ejiofor and Idris Elba get nods for Best Actor, which no black Brit has ever won
Geoffrey Macnab reviews The Desolation of Smaug - the meat in Peter Jackson's Hobbit sandwich
peopleWhat advice would David Cameron give to his younger self?
Mystery of Epping Forest 'big cat' is solved
French café starts charging extra to rude customers
Scientist create 'robotic sperm' to help with fertilisation and drug delivery
Australia incest case: Severely deformed children found in remote farming community after generations of inbreeding
Fox News presenter tells viewers it is a 'fact' that both Jesus and Santa Claus are white
- 1 French café starts charging extra to rude customers
- 2 Sun will 'flip upside down' within weeks, says Nasa
- 3 Australia incest case: Severely deformed children found in remote farming community after generations of inbreeding
- 4 Physicists discover 'clearest evidence yet' that the Universe is a hologram
- 5 Fox News presenter tells viewers it is a 'fact' that both Jesus and Santa Claus are white
- < Previous
- Next >
iJobs Money & Business
£30000 - £45000 per annum + Bonus + Benefits: Harrington Starr: Regulatory Man...
£50000 - £75000 per annum + benefits + bonus: Harrington Starr: Pre-Sales / Cl...
£40000 - £60000 per annum + Bonus + Benefits: Harrington Starr: Regulatory Man...
£40000 per annum: Harrington Starr: Senior Network Engineer (CCNP, CCIE, Netwo...