The latest news on the MF Global bankruptcy and fallout, published in the John Lothian Newsletter the morning of November 2, 2011.

In the wake of the MF Global bankruptcy, John Lothian Newsletter has created a special section on devoted to news, information and commentary. The section features archived news stories featured in the John Lothian Newsletter, analysis and breaking news. Check regularly for updates. See the MF Global news section here.

UPDATE: CME Group Seeking To Relocate MF Global Client Business
By Jacob Bunge and Doug Cameron Of DOW JONES NEWSWIRES
CME Group Inc. (CME) on Tuesday sought to rally major clearing firms to take on parts of MF Global’s client base, an effort that could free up some customer money trapped by the brokerage firm’s collapse Monday, according to people familiar with the situation.

MF Global Admits To Federal Regulators Money Diverted Out Of Customer Accounts – Official 
By Victoria McGrane and Jamila Trindle Of THE WALL STREET JOURNAL
MF Global Ltd. (MF) admitted to federal regulators that money had been diverted out of customer accounts in violation of futures rules and law, according to a federal official. The Wall Street brokerage, which filed for bankruptcy Monday, admitted to the shortfall amid mounting questions from regulators as they went through the firm’s books while trying to facilitate a sale to Interactive Brokers Group Inc. (IBKR), the official said. Regulators still don’t know where the customer funds went, who directed the move or how widespread the practice was, the official said.

MF Global Failed to Segregate Client Collateral, CME Group Says
By Silla Brush and Matthew Leising
Nov. 1 (Bloomberg) — MF Global Holdings Ltd., under investigation by U.S. regulators after filing for bankruptcy protection, violated requirements that it keep clients’ collateral separate from its own accounts, the head of the world’s largest futures exchange said.

MF Global Funds Are All Accounted For, Lawyer Tells Judge
By Tiffany Kary and Linda Sandler – Bloomberg
MF Global Holdings Ltd. (MF), run by former New Jersey governor and Goldman Sachs Group Inc. (GS) co- chairman Jon Corzine, has accounted for all its customer funds, said Kenneth Ziman, a lawyer for MF Global, citing the company’s management.

MF Global resumes CME, ICE trade to liquidate positions
Reuters via Yahoo! News
CHICAGO (Reuters) – Bankrupt broker MF Global was allowed to resume liquidating customers’ positions on major U.S. futures exchanges on Tuesday, providing a marginal bit of relief for some anxious clients.

MF Global Collapses as Books Questioned
MF Global Holdings Ltd. collapsed into bankruptcy Monday when a potential buyer bolted over a discrepancy of hundreds of millions of dollars in the beleaguered securities firm’s books, people familiar with the matter said.

CME Group: Questions Persist Around MF Global Recordkeeping
By Jacob Bunge – Dow Jones
The chief executive of futures exchange operator CME Group Inc. said Tuesday that exchange staff and regulators were still trying to get a handle on the collapse of broker-dealer MF Global Holdings Ltd., which slid into bankruptcy protection on Monday.

CME Suspends MF Global As Uncertainty Persists
By Jacob Bunge and Doug Cameron – Dow Jones Newswires
CME Group Inc. (CME) suspended MF Global Holdings Ltd. (MF) as a clearing member late Monday, ending a day of efforts by global exchanges to clamp down on the collapsed U.S. broker’s ability to trade. Chicago-based CME, the world’s largest derivatives exchange by volume, was among the last of its peers in the U.S. and Europe to serve notice that MF Global and its clients were barred from new business and limited to liquidation orders that closed out their positions.

MF Global Not in Compliance With Customer Funds, CME Group Says
By Matthew Leising – Bloomberg
Nov. 1 (Bloomberg) — MF Global Holdings Ltd., the broker that filed for bankruptcy yesterday and is the subject of regulatory probes over funds missing from client accounts, isn’t in compliance with CME Group Inc. and Commodity Futures Trading Commission rules.

Others Pay Price for Corzine’s Risky Revenge: William D. Cohan
In the end, Jon Corzine was little more than an unsupervised rogue trader.

Corzine Had It Coming
The ex-governor’s MF Global screw-up is not surprising given his Wall Street record, says Charles Gasparino.

In Corzine Comeback, Big Risks and Steep Fall
When Jon S. Corzine joined MF Global last year it seemed like a strange choice — the firm had none of the glamour, let alone the profits or footprint of Goldman Sachs, the bank he ran during the 1990s.

MF Global Customers Call SIPC Asking for Money After Bankruptcy
By Linda Sandler – Bloomberg
Nov. 1 (Bloomberg) — Customers of bankrupt broker-dealer MF Global Inc. have been calling the Washington offices of the Securities Investor Protection Corp. today asking for their money, a lawyer for the corporation said.

MF Global Hired FTI Consulting – Sources
Securities firm MF Global Holdings Inc. hired restructuring adviser FTI Consulting Inc., people familiar with the matter said. The details of the assignment are unclear. MF Global filed for bankruptcy protection Monday.

Factbox: MF Global in European energy, commodities market
Reuters via Yahoo! News
LONDON (Reuters) – MF Global Holdings Ltd, which filed for Chapter 11 bankruptcy in the United States on Monday, has some energy and commodities clients in Europe mostly via its UK unit MF Global UK Ltd.

CFTC-SEC Statement on MF Global
Press Release
Washington, DC – The Commodity Futures Trading Commission and Securities and Exchange Commission today made the following joint statement: “For several days, the SEC, CFTC and other regulators had been closely monitoring developments affecting MF Global, Inc., a jointly registered futures commission merchant and broker-dealer, in anticipation of a transaction that would include the transfer of customer accounts to another firm.

Stoltmann Says No Question of MF Global Criminal Probe (Video)
Andrew Stoltmann, a Chicago lawyer who represents investors in securities litigation, talks about MF Global Holdings Ltd. (MF) and prospects for stronger securities regulation.

Stock-Options Clearinghouse OCC Suspends MF Global
Jacob Bunge – Dow Jones
MF Global Holdings Ltd. (MF) on Tuesday had its membership suspended by the OCC, which clears trades for all U.S. stock-options exchanges, according to an OCC notice.

KCBT: MF Global Suspended
Press Release

CBOE: Summary Suspension of MF Global, Inc. 
Press Release

CHX: Notice of Suspension: MF Global, Inc.
Press Release

[LME] MF Global UK Ltd – Unsettled client contracts 
Press Release

NYSE to Suspend Trading in MF Global Holdings Ltd.; Moves to Remove from the List
Press Release

GreenX Suspends MF Global Inc. as Clearing Member
Press Release

HKMEx Suspends Trading of MF Global
Press Release

MGEX Clearing House: MF Global Inc. – Clearing & Trading Rights Suspended
Press Release

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