One risk associated with financial hedging many companies had not considered was suddenly a worry-or, for some, a crisis-when MF Global (New York) filed for bankruptcy on Oct. 31, 2011, after experiencing huge losses stemming from speculation in European government bonds. The company was one of the largest futures commission merchants in the world, so its bankruptcy affected people who traded derivatives in almost every industry. As the firm neared insolvency, its management allegedly authorized the use of customer funds to meet margin calls on its European bond transactions, leading to the loss of that money. On July 10, 2012, anotherwell-known futures commission merchant, Peregrine Financial Group (also known as PFGBest), filed for bankruptcy after its founder confessed to fraud with customer money as part of a failed suicide attempt.
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