Global financial derivatives broker MF Global, and its finance subsidiary MF Global Finance USA, filed for Chapter 11 bankruptcy protection Monday morning.
The filing led to a disappointing close on Wall Street Monday afternoon as the Dow and NASDAQ indexes dropped 2.26% and 1.93%, respectively.
Jon Corzine, MF Global CEO, known as a risk-taking chief, reportedly "bet large sums that Europe would not let countries like Italy and Spain default," according to The New York Times. Over the weekend, discussions for a buyout of MF Global by Interactive Brokers fell through.
CME Group, a futures exchange operator, began investigating MF Global's books on Monday and banned the company and its clients from doing further business after finding major discrepancies in the level of client funds. The issue reportedly led to the failed buyout of MF Global by Interactive Brokers Group over the weekend.
MF Global, which did not return inquiries for comment, issued a press release and has also posted notices to clients on its corporate website.