ONE OF THE largest brokerage firms in the US has become the first major Wall Street casualty of the Eurozone debt crisis.

MF Global run by former New Jersey governor Jon S Corzine has filed for bankruptcy.

It had built up a $6 billion portfolio of debt issued by EU countries including Italy, Spain and Portugal. Last week it reported its biggest quarterly loss to date and came under further pressure when its debt rating was subsequently downgraded.

The New York Federal Reserve suspended trading on MF Global shares yesterday.

Daniel Alpert of Westwood Capital Partners LLC said that MF Global’s problems show the dangers of making investments which can be influenced by government action: “I don’t think it’s a canary in the coal mine, but it does show you that it’s still a very volatile market.”

Investigation

US federal regulators have launched an investigation into suspected missing funds from MF Global.

Up to $700 million of customer funds was discovered missing during recent negotiations to sell part of the company and transfer customer funds to another company.

The US Securities and Exchange Commission and the Commodity Futures Trading Commission said in a statement that they and other regulators has been keeping an eye on MF Global over the past week in anticipation of that deal.

The statement said that the company reported “possible deficiencies” in customers’ funds yesterday and said that an agreement was not reached on the deal under discussion.

- Additional reporting by the AP

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