Guess Who Snapped Up MF Global Debt?

Posted by on Dec 09, 2011 at 7:33 am

Imagine out surprise. Hey, Jon Corzine, if you’re still wondering where all that money went, check with your buddy George Soros.

About $2 billion worth of European bonds owned by MF Global were bought by billionaire investor George Soros’s family fund, the Wall Street Journal wrote on Friday, quoting people close to the matter.

On October 31 MF Global collapsed into the eighth-largest bankruptcy in U.S. history and an estimated $1.2 billion in client funds remains unaccounted for.

According to press reports, the board allowed the company’s exposure to European sovereign debt to increase by more than four times to $6.3 billion between late 2010 and shortly before it entered bankruptcy.

The firm, led by former Senator Jon S. Corzine, sold part of the bonds, but still had about $4.8 billion worth of them on its books when it went bankrupt, the Wall Street Journal wrote.

They were turned over to KPMG, MF Global’s bankruptcy administrator in London; they were then offered to big investors immediately after the company’s collapse by MF Global’s London clearing house, LCH Clearnet, the paper said, quoting a KPMG spokeswoman.

A number of large investors passed on the bonds but, according to people close to the matter quoted by the Wall Street Journal, Soros’s interest was piqued and he bought around $2 billion of the bonds at a level below the market price at the time.

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