The Collapse of MF Global : What Happened and Lessons Learned

Futures market participants were caught off-guard when MF Global, a commodity futures broker, filed for bankruptcy on October 31st, 2011. By now, bankruptcies of financial firms are not unusual, so why did this one cause such consternation? Essentially, this episode educated industry participants that customer protections in the U.S. commodity futures markets are more ambiguous than expected. This paper examines the activity that led to the collapse of MF Global and provides lessons that can be drawn from this unprecedented event