MF Global files for Chapter 11 bankruptcy

MF Global, a securities company run by former New Jersey governor Jon Corzine, filed for bankruptcy protection Monday, Bloomberg BusinessWeek reports.

The company that traded commodities and derivatives made bad bets on European debt, leading up to this point, CNN Money reports. MF Global will leave behind approximately $2 billion in debt to Wall Street companies.

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The fate of MF Global has been closely watched on Wall Street as a sign of how Europe's sovereign debt crisis could be cause trouble for U.S. financial companies, CNN Money reports. It is now the first major U.S. casualty caused by the euro zone debt crisis.

This news comes just one week after MF Global reported its biggest-ever quarterly loss, $186.6 million for the fiscal second quarter, the Associated Press reports. Shares plunged 66 percent last week and the company was downgraded to junk status.

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MF Global listed a total debt of $39.7 billion and assets of $41 billion in Chapter 11 papers filed in Manhattan’s U.S. Bankruptcy Court today, Bloomberg BusinessWeek reports. Its finance unit also filed for bankruptcy with debt of as much as $50 million and assets as much as $500 million.

“The boards of directors of both entities authorized the filing of the Chapter 11 petition in order to protect their assets,” the companies said today, Bloomberg BusinessWeek reports.

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Usually when a company files for bankruptcy its shares become worthless. According to the Wall Street Journal, some of MF Global’s biggest shareholders include: Fidelity, with 13.9 million share and Guardian Life Insurance Co. with 12.9 million shares.