MF Global Holdings Ltd

From MarketsWiki

(Redirected from MF Global)
Jump to: navigation, search
MF Global Holdings Ltd
image:mfglobal.jpg
Founded 2007
Headquarters 717 Fifth Avenue, New York, NY 10022
Key People Jon S. Corzine, CEO; Karel F. Harbour, CEO Europe; Thomas Harte, CEO New York; Laurence O'Connell, CEO Asia-Pacific
Web site www.mfglobal.com


MF Global Holdings Ltd, formerly known as MF Global Inc., formerly known as Man Financial,[1] is one of the world's largest derivatives brokers, accounting for around 10 percent of exchange-traded volumes alongside a significant presence in OTC products and cash securities. The Bermuda-registered group was rebranded and spun off from Man Group in July 2007 through an initial public offering which valued the company at $3.63 billion.[2] It changed its name to MF Global Holdings Ltd in January 2010, when it moved its headquarters to Delaware. [3]

In November of 2009, MF Global announced plans to relocate its corporate headquarters to the U.S. from Bermuda.[4]

MF Global is the world's largest futures retail broker, with over 138,000[5] active client accounts. It has grown organically and through 18 acquisitions since 1989, including its 2005 purchase of client accounts and other assets from Refco.

The company has a global footprint through offices in New York and Chicago, Bermuda, Toronto, London, Paris, Mumbai, Singapore, Sydney, Taipei, Tokyo, Hong Kong and Dubai. It operates on more than 70 exchanges,[6][7] and is the largest single broker on most of the leading platforms including the CME and Eurex.

MF Global owned a stake in U.S. Futures Exchange but announced on Dec. 17, 2008 it would exit its interest in USFE by the end of 2008 if it could not find a buyer for its stake.[8]

Contents

History

MF Global traces its roots to the sugar trading business started by James Man in England in 1783, which evolved into broader commodities trading before its later transformation into a financial services business during the 1980s.[9]

Its former parent, then known as ED&F Man, diversified from its pure cash commodities into commodity futures in the late 1970s, and established the Anderson Man futures brokerage in 1981. It later changed its name to ED&F Man International and then Man Financial, before adopting the current brand following the IPO and separation of the brokerage from the asset management operation.

ED&F Man operated as a partnership through to the 1970s, when it started an international expansion which, by 1983, saw its staff climb to 650 employees. ED&F Man listed on the London Stock Exchange in 1994, changing its name to Man Group in 2000. Its agricultural business, which retained the EDF Man name, was sold to management the same year.

The rapid expansion of the Man Investments unit in the nascent hedge fund management business shrouded many investors from the development of its brokerage unit as global derivatives volumes began their exponential rise at the start of the decade.

Man Financial embarked on a series of acquisitions which expanded its product capability and geographic reach, starting in 1989 with the purchase of the Chicago-based GNP Commodities, and including well-known industry names such as Geldermann, Gerald Metals, Tullett & Tokyo Futures, First American Discount Corporation, Australia’s Ord Minnett and GNI.

The purchase of GNI in 2002 was the largest deal until the transformative $323 million acquisition of client assets and accounts from entities of Refco following the U.S. financial services group’s collapse in late 2005. Only a month a earlier, Refco had closed its purchase of managed futures provider Cargill Investor Services from agribusiness giant Cargill. The Refco deal followed a hotly-contested auction with Cerberus Capital, the private equity group, and boosted Man Financial’s scale in retail and institutional business.[10]

The acquisitions have continued, with its retail complex augmented in January 2007 with ChoiceOdds, an independent UK-based financial binary trading firm. MF Global plans to list contracts developed by the firm on the USFE.[11]

On March 17, 2008, shares of MF Global plummeted on liquidity fears.[12]. The CME,[13] ICE,[14] Nymex[15] and CFTC[16] issued statements confirming MF Global was in compliance with regulatory and financial requirements.

Business Development

CEO Jon Corzine expressed the company's interest in a push into money management and investment banking during a late-August interview with the Financial Times. The push is seen as a way to capitalize on the derivatives brokerage’s strength in commodities markets, Corzine said.[17]

The overhaul began in the previous quarter with sweeping cost cuts, a revamped employee compensation scheme and an increase in using MF Global’s own capital at risk to facilitate client trades. But Wall Street remains somewhat sceptical that MF Global can gain footholds in two of the most competitive corners of financial services, especially investment banking, the FT said.[18]

Key People

Bernard W. Dan stepped down as CEO of MF Global on March 23, 2010, succeeded by Jon S. Corzine. [19] Dan was originally appointed CEO on Oct. 29, 2008, succeeding Kevin R. Davis.[20] Dan, the former Chicago Board of Trade CEO, was made chief operating officer of MF Global Ltd.’s North American unit, reporting to MF Global’s U.S. head, Thomas Harte, and the company’s global COO, Christopher Smith. The appointment was announced June 12, 2008.[21] Smith has since left the company.

Executives

Board of Directors:

Registration

Regulatory Issues

On Feb. 28, 2008, MF Global announced a bad debt provision[22] in the amount of $141.5 million. The provision was the result of the actions of a registered representative in a MF Global branch office, who on Feb. 27 of 2008, while trading in the wheat futures market in his personal account, substantially exceeded his authorized trading limit. The individual involved was terminated immediately. Client funds were not impacted in any way by this event. MF Global held a conference call[23] at 11 a.m. EST on Feb. 28 to discuss the matter.

According to a regulatory filing by MF Global Inc. in September of 2009, "one of the company’s brokers, Evan Dooley, trading for his own account out of a Memphis, Tennessee branch office through one of the company’s front-end order entry systems, Order Express, put on a significant wheat futures position during the late evening of Feb. 26, 2008 and early morning of Feb. 27, 2008. The positions were liquidated at a loss of $141,045,000 on Feb. 27, 2008. The trades were unauthorized and because the broker had no apparent means of paying for the trades, the company, as a clearing member of the exchange, was required to pay the $141,045,000 shortfall. The exchange and regulators were immediately notified, the broker was promptly terminated, and a public announcement of the loss was made by the company the next day."[24]

Subsequently, MF Global was fined $10,000,000 by the CFTC over the incident and an unrelated Natural Gas incident from 2003.[25][26] The CME Group also fined MF Global $495,000 over the wheat incident.[27]

References

  1. ↑ "F-1 Registration statement". MF Global. Retrieved on November 15, 2007.
  2. ↑ Subprime fears hit financial offerings. Financial Times. Retrieved on November 15, 2007.
  3. ↑ MF Global moves headquarters to U.S. from Bermuda. Reuters. Retrieved on January 7, 2010.
  4. ↑ MF Global Exits Bermuda, Posts Loss. Wall Street Journal. Retrieved on November 5, 2009.
  5. ↑ MF Global Declares Quarterly Dividend Payments for Preference Shares. MF Global via Yahoo.com. Retrieved on October 28, 2008.
  6. ↑ MF Global Declares Quarterly Dividend Payments for Preference Shares. MF Global via Yahoo.com. Retrieved on October 28, 2008.
  7. ↑ Exchange Memberships. MF Global. Retrieved on October 29, 2009.
  8. ↑ MF Global to Exit U.S. Futures Exchange. MF Global. Retrieved on December 26, 2008.
  9. ↑ Man oh Man!. Futures Industry Magazine. Retrieved on October 29, 2009.
  10. ↑ Spoils of Refco auction go to Man Group. Financial Times. Retrieved on November 15, 2007.
  11. ↑ Press Release. MF Global. Retrieved on January 22, 2008.
  12. ↑ MF Global plunges amid liquidity fears. Energy Risk. Retrieved on March 18, 2008.
  13. ↑ CME Group Statement on MF Global in Good Standing at CME Clearing. CME Group. Retrieved on March 18, 2008.
  14. ↑ ICE Confirms MF Global Remains in Good Standing. InternContinentalExchange. Retrieved on March 18, 2008.
  15. ↑ NYMEX Holdings, Inc. Statement Regarding Its Clearing Members and Financial Safeguards. Nymex. Retrieved on March 18, 2008.
  16. ↑ CFTC Statement on MF Global. U.S. Commodity Futures Trading Commission. Retrieved on March 18, 2008.
  17. ↑ MF Global to enter money management. Financial Times. Retrieved on August 24, 2010.
  18. ↑ MF Global to enter money management. Financial Times. Retrieved on August 24, 2010.
  19. ↑ Corzine Hired as CEO of MF Global. The Wall Street Journal. Retrieved on March 23, 2010.
  20. ↑ Press Release. MF Global. Retrieved on October 29, 2008.
  21. ↑ Former CBOT Chief Dan Joins MF Global. Crain's Chicago Business. Retrieved on June 12, 2008.
  22. ↑ Press Release. MF Global. Retrieved on February 28, 2008.
  23. ↑ Conference Call. MF Global Investor Relations. Retrieved on February 28, 2008.
  24. ↑ MF Global Inc. Statement of Financial Condition, September 30, 2009. MF Global Inc.. Retrieved on December 25, 2009.
  25. ↑ CFTC Sanctions MF Global Inc. $10 Million for Significant Supervision Violations between 2003 and 2008. U.S. Commodity Futures Trading Commission. Retrieved on December 25, 2009.
  26. ↑ MF Global faces $10m CFTC fine. Financial Times. Retrieved on December 25, 2009.
  27. ↑ CME Fines MF Global $495,000 Over Rogue Wheat Trades. Nasdaq. Retrieved on December 25, 2009.
Retrieved from "http://www.marketswiki.com/mwiki/MF_Global_Holdings_Ltd"
Personal tools