Struggling MF Global nears sale
By Tom Braithwaite in New York, Financial Times
The Federal Reserve Bank of New York has suspended operations with MF Global, the broker-dealer led by Jon Corzine which is struggling to avert a collapse.
The New York Fed said in a statement on Monday that the suspension would continue until MF Global meets its policy on primary dealers
The broker dealer also on Monday morning sent a note to clients of its spread betting business informing them it had taken a “strategic decision” to discontinue the operations with immediate effect, requiring them to either liquidate their positions immediately or post 100 per cent of their value.
MF Global was close to a sale of the bulk of its assets to electronic broker and marketmaker Interactive Brokers Group on Sunday, according to people familiar with the situation. Thomas Peterffy, chief executive and founder of Interactive, told the Financial Times he was unable to comment. MF Global also declined to comment.
The holding company for MF Global would be put into bankruptcy as part of a complex end to a saga that began last week when a slew of credit rating downgrades threatened the company’s viability and left it racing to find a buyer. People close to the situation said on Sunday night that talks were continuing and cautioned that a deal was not final.