FBI joins the probe on MF Global as it enters the spotlight

Just days after MF Global filed for Chapter 11 bankruptcy, the securities company is already under investigation after about $700 million in customer accounts has gone missing, by the Securities and Exchange Commission and CME Group Inc., and the FBI is expected to join.

Read more at GlobalPost: MF Global files for Chapter 11 bankruptcy

MF Global, headed by ex-New Jersey governor and Goldman Sachs chairman Jon Corzine, filed for bankruptcy Oct. 31 after bad investments in European sovereign debt. Once news of the bankruptcy was widespread, MF Global informed the CFTC and SEC there were "possible deficinieces in customer futures segregated accounts held at the firm." MF Global has yet to say where the money ended up or how it was used. Their lawyers said there was no shortfall of customer money during a hearing in Federal Bankruptcy Court in Manhattan Tuesday.

Not only has MF Global’s collapse stirred the markets, it has caused the SEC Chairman Arthur Levitt to speak out against regulators who “just didn’t do the job,” Bloomberg reports. During a radio interview on Bloomberg Surveillance, Levitt said, the Commodity Futures Trading Commission “should have been aware of the leverage taking place” at MF Global, “something that was widely known on the street.”

Read more at GlobalPost: Netflix stocks plummet, receives downgrade

The troubled company fell Wednesday in its first day of over-the-counter trading after filing for bankruptcy, leading to the New York Stock Exchange to determine it is "no longer suitable for listing." Not only was the company's untimely bankruptcy filing taken into account, but also its third quarter net loss and credit rating agency downgrades. MF Global’s stock dropped 83 percent to just 21 cents in the early afternoon.

Last week MF Global disclosed its extent of its bets on European debt– $6.29 billion from Italy, Spain, Belgium, Portugal and Ireland. MF Global reported a record quarterly loss of $191.6 million and its shares plummeted 67 percent while bonds started trading at distressed levels.

During Federal Reserve Chariman Ben Bernanke's news conference Wednesday, the question of the Fed's role in MF Global's regulation was brought up. Bernake "emphasized" that the Fed was not a regulator, therefore could not comment on the quick decline of the company. Bernanke referenced the Fed making MF Global a primary dealer in February because they met the criteria at the time.

"But we are not the regulators of MF Global, that's done by the SEC and CFTC," Bernanke said to reporters. "We do not have ongoing insight into developments within the company." Bernanke also was quick to note that just because the Fed made MF Global a primary dealer it didn't "constitute a seal of approval."

It has been only two days since Corzine announced his company was filing for bankruptcy and has sent MF Global on a roller coaster ride. Not even Bernanke and the Federal Reserve are able to avoid questions of MF Global's outcome. What will be the next bump on Corzine's ride?

Read more at GlobalPost: U.S. stocks fall as investors lose hope