NEW YORK, N.Y. – A Wall Street brokerage firm run by former New Jersey Gov. Jon Corzine filed for bankruptcy on Monday. MF Global Holdings’ position is blamed on the European debt crisis.
MF Global had made major investments in the sovereign debt of troubled countries like Italy and Spain. As worries about Europe’s debt crisis increased, two credit ratings agencies downgraded MF Global’s debt and started the spiral towards bankruptcy.
A lawyer representing the firm told a bankruptcy court judge that all of the company’s assets have been accounted for, according to a report by Bloomberg Businessweek.
However, the Wall Street Journal reported that MF Global Holdings told federal regulators that money had been diverted out of customer accounts.
Company executives were unable to complete a sale of portions of MF Global to another firm over the weekend.
Corzine took over as chairman and CEO of MF Global after losing to Chris Christie in the 2009 gubernatorial election. Before he entered politics, Corzine was the chairman and CEO of Wall Street giant Goldman Sachs.
Under Corzine’s administration, New Jersey invested $180 million in the troubled Lehman Brothers investment firm in 2008, months before it went bankrupt and left the state with worthless stock. In 2010, the federal Securities and Exchange Commission cited New Jersey for allegedly misstating the level of funding of its pension system between 2001 and 2007, under the administrations of Donald DiFrancesco, James McGreevey and Corzine.
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