ON SUNDAY night, MF Global was preparing to announce that its core operating businesses had been sold to Interactive Brokers Group, a rival electronic broker, which was prepared to inject $1 billion of capital.

But, by yesterday morning, the deal had fallen apart. MF Global filed for bankruptcy protection and its traders were banned from trading floors in Chicago and New York. The ambitious plans of Jon Corzine, the chief executive, were in tatters.

With customers and counterparties struggling to extricate their positions and money from MF Global and thousands of employees likely to lose their jobs, recriminations have already started. Many criticisms are aimed at Mr Corzine’s attempt to spice up the company’s earnings with a $6.3 billion bet on European sovereign debt, which analysts judged excessive for its balance sheet.

Mr Corzine’s last hope of salvaging anything over the weekend from the company he joined only last year lay in the form of Thomas Peterffy, a 66-year-old Hungarian-born broker and horse fanatic.

Mr Peterffy, chief executive and founder of Interactive Brokers Group, had agreed in principle to buy the bulk of MF Global’s assets on Sunday. The brokerage itself had even gone as far as drafting a statement announcing the sale.

But ultimately terms could not be finalised before markets opened yesterday, which the company recognised would be a hard deadline to extract anything from a mess that had its roots in Mr Corzine’s quixotic bet on European sovereign debt.

Mr Corzine is a former Goldman Sachs chief executive and Democrat politician who served as governor of New Jersey from 2006 to last year. Before that, he represented the state in the US Senate. In his efforts to become what some dubbed a mini-Goldman, Mr Corzine’s critics say that MF Global may have leveraged its bets too much and may not have paid enough attention to risk management.

Even on the company’s earnings day a week ago, he was hinting MF Global would be an acquirer of businesses as it sought to transform itself into a full-service investment bank. But he did so while reporting an unexpected loss and after the first in a fatal run of credit-rating downgrades.

Yesterday morning’s events were less than orderly. Many MF Global floor traders, apparently unaware their employer was about to file for bankruptcy, turned up to work at the Chicago Mercantile Exchange’s trading floor to discover their security clearance had been removed from the system.

And, as with any financial company, but particularly one with only moderate scale like MF Global, there is unlikely to be a company to emerge from bankruptcy.

“The frustrating thing for me about MF Global is not the foreign debt portfolio, prop trading or any other operation of the firm, it is the lack of risk assessment . . . Can the balance sheet of the firm sustain the worst-case scenario?” said Daniel Gramza, a futures trader and president of Gramza Capital Management. “It also saddens me because I have worked with good solid people in MF Global offices around the globe and these people will be affected by this lack of risk assessment.”

A list of creditors published by Reuters last night said JP Morgan Chase, as trustee, is owed $1.2 billion, while Deutsche Bank, also in the capacity of trustee, is owed various sums varying from $76 million to $325 million. – (Copyright The Financial Times Limited 2011/Reuters)