MF Global’s Road to Failure

In the final months of MF Global, the capital investment firm run by former New Jersey governor Jon Corzine that filed for bankruptcy Monday, there were a number of warning signs that the company was in deep trouble—but efforts by Corzine and others in the firm to raise its capital were not enough to save it. Multiple regulators and the FBI are currently investigating how the firm could collapse—and what happened to some $630 million that has gone missing—but there were a number of watchdog agencies that had sounded the alarm at MF Global. In June, regulators reviewed financial statements and found that MF Global had bought debt from Italy, Ireland, and other troubled European nations, and Corzine traveled to Washington in July to persuade the SEC that the firm had enough capital to support the trades. But the rumors about MF Global’s problems were strong enough that Moody’s dropped the firm’s rating on Oct. 25 to just one notch above junk.