The Federal Reserve Bank of New York said Monday it has suspended MF Global Inc., a subsidiary of MF Global Holdings Ltd., from conducting new business with it.
In a brief statement on its website, the New York Fed said the suspension will continue until MF Global shows it is fully capable of meeting its policy requirements regarding relationships with primary dealers or until it terminates MF Global's status as a primary dealer.
MF Global became a primary dealer in February, part of the strategic shift under Chief Executive Jon Corzine that saw it join an exclusive club of big banks and financial institutions that trade directly with the Federal Reserve and underwrite U.S. government bonds.
MF Global is one of 22 primary dealers at the New York Fed, with four added this year.
According to a report in the Wall Street Journal, MF Global Holdings Ltd. was nearing a deal late Sunday night to file for bankruptcy protection as soon as Monday and sell assets to Interactive Brokers Group Inc.
