MF Global Files For Bankruptcy, Putting 700 UK Jobs At Risk

700 UK Jobs At Risk As MF Global Files For Bankruptcy
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The eurozone debt crisis has claimed its first big American victim. Troubled US brokerage firm MF Global has filed for bankruptcy protection after a deal to rescue it fell through. The company employs around 2,000 people worldwide and 700 in the UK.

The firm, headed by former Goldman Sachs banker John Corzine, is understood to have taken large bets on the eurozone. Last week, the company reported that its total exposure to eurozone sovereign debt was in excess of $6bn ($4bn), and that it had made a loss of $192m in the quarter. Two rating agencies cut the company's credit rating to junk, and its shares collapsed.

On Sunday night, rumours circulated that a deal had been struck with Interactive Brokers, a rival, but the end of that deal leaves the company without a clear future.

On Monday morning in the US, the major derivatives exchanges Nymex and the Chicago Mercantile Exchange denied the group's brokers access.

The company filed for bankruptcy later in the morning, listing its major creditors as JPMorgan Chase, which has an unsecured claim of more than $1.2bn, and Deutsche Bank, with more than $1bn outstanding. Other creditors include an IT consultancy, Headstrong Services, with a claim of nearly $4m, and the TV channel CNBC, which is owed $845,000.

While MF Global is not a systemically large institution, the effect that the bankruptcy could have on confidence could be damaging to a nascent recovery in world stocks following a deal in Brussels last week.