John Corzine's bid to revive his Wall Street career crashed and burned on Monday, when his futures brokerage MF Global Holdings filed for bankruptcy protection following bad bets on euro zone debt.
Corzine, who once ran Goldman Sachs and became governor of New Jersey, had been trying to turn MF Global into a mini Goldman by taking on more risky trades.
But once regulators forced it to disclose the bets on sovereign debt issued by countries including Italy, Portugal and Spain, the firm's fortunes quickly began to unravel.
MF Global's meltdown in less than a week made it the biggest U.S. casualty of Europe's debt crisis, and the seventh-largest bankruptcy by assets in U.S. history.
The Chapter 11 bankruptcy protection filing came after talks to sell a variety of assets to Interactive Brokers Group broke down earlier on Monday, a person familiar with the matter said. MF Global's shares plunged last week as the company's credit ratings were cut to "junk."
Regulators had expressed "grave concerns" about the viability of MF Global, which filed for bankruptcy only after "no viable alternative was available in the limited time leading up to the regulators' deadline," the company's COO, Bradley Abelow, said in a court filing.
The severity with which markets and regulators reacted to MF Global's troubles may have surprised Corzine, whose affinity for risk-taking finally caught up to him after a career that took him to the top echelons of Wall Street and then into politics first as a U.S. senator.
What’s the trade?
Trader Brian Kelly thinks the biggest winner is Interactive Broker due to speculation the rival may pursue some of MF’s clients, “particularly the small to mid size hedge funds and individual traders. That's Interactive Broker's wheel house. Those kinds of money pros won’t go to a Goldman,” he says.
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Trader disclosure: On Oct 31, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Nathan is long Jan puts BAC; Nathan is long Nov & Jan puts MS; Nathan is long Jan calls NFLX; Nathan is long Jan puts INTC; Nathan has long Nov puts CSCO; Kelly is long GLD; Terranova is long APC; Terranova is long F; Terranova is long AAPL; Terranova is long FCX; Terranova is long CAT; Terranova is long AXP; Terranova is long EMC; Terranova is long IBM; Finerman owns BAC; Finerman owns GOOG; Finerman owns JPM; Finerman’s firm owns AAPL; Finerman’s firm owns YHOO and short calls; Finerman’s firm owns IBM and short calls
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Gartman is short Euro
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Iurorio is long JNJ short calls
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