The country’s seventh largest trading firm, MF Global filed for bankruptcy October 31 and sent shock waves through the investment fraternity. MF Global was a brokerage that acted as a counter party to investors who wanted to buy or sell commodities, including crops like corn and soybeans. In a recent letter the CME Group, owner of the Chicago Board of Trade admitted that MF Global’s bankruptcy created “a difficult period for many of our customers”. However, CME assured everyone that commodity trading investors will still be able to access their accounts despite the bankruptcy.
Nevertheless, the trustee has frozen the customer funds of the firm and as a result, some commodity traders and also farmers have not been able to access their money since the bankruptcy.
MF Global was run by John Corzine, formerly of Goldman Sachs and ex-governor of New Jersey. The firm made bought extensively into European debts, particularly in countries like Italy, Spain, Portugal and Belgium. They are also believed to have dipped into so-called segregated funds held by trading customers in a way that is similar to bank deposits. Regulators have discovered about $600 million in investor funds that went missing and are now investigating the matter.
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