New York: MF Global fired all 1,066 of its brokerage employees on Friday, triggering anger and resentment about the firm's collapse after bad bets on European debt under former CEO Jon Corzine's leadership.
How the final blow was delivered upset many staff — with some learning by email and others through news on television.
"Fifteen years and no severance!," shouted one angry MF Global employee as he left the firm's offices on 5th Avenue in Manhattan after hugging the receptionist and doorman.
The trustee in charge of liquidating the brokerage said in a statement that the workers were let go immediately, though they will be paid until November 15 and up to 200 will be rehired to help with the wind-down.
The timing couldn't be worse for the employees. Not only is the US unemployment rate at 9 per cent, other Wall Street firms have been firing staff in recent months as trading profits decline and tighter regulation takes hold.
"The lives of so many people have been disrupted. We did not even get told individually, we got a group email," said MF Global analyst Pierre-Yvan Desparois outside the MF Global offices.
Bets on people's lives
"The company had a lot of potential, it did not have to end like this. I'm a credit analyst and I could have told Corzine not to invest 100 per cent in the sovereign debt situation. He placed bets with people's lives," said Desparois.
That Corzine criticism was echoed by Todd Thielmann, a broker with MF Global in Chicago.
"His ego has ruined a lot of lives," said Thielmann. "It was more about the execs at the company than the grunts."
Another employee who worked in market data at the firm in New York for three years said she would have never left.
"It was a great job. The camaraderie, the company was great. But people at the top let us down. It came as a complete shock," she said.
Not every employee saw the pink slip email, and not everyone was surprised.
A broker in Chicago learned about the termination through news reports and said employees were being called into meetings as the media began reporting the development.
"When you are working for a company that is bankrupt, you know it's coming," said an MF Global broker who attended a 20-minute meeting in New York.
The firings come as the trustee, James Giddens, works to identify and locate the brokerage's assets, including $600 million (Dh2.2 billion) in missing customer money. Giddens is trying to account for all of the brokerage's assets with help from forensics investigators at Ernst and Young. The trustee said he has also retained Deloitte to help with the transfer of about 17,000 commodities accounts worth roughly $1.5 billion.
Federal agencies, including the Commodity Futures Trading Commission, the Securities and Exchange Commission and the Dep-artment of Justice, are investigating whether the money missing from customer accounts may have been improperly mixed with the firm's funds.
Giddens was appointed to liquidate the brokerage after MF's parent company declared bankruptcy on October 31, having lost on risky bets on European debt.
Resignation
The bankruptcy shocked Wall Street, in part because the company was run by former New Jersey Governor and Goldman Sachs head Jon Corzine, who advocated tough regulations on Wall Street firms during his political career.
Corzine resigned last week, saying he would not seek about $9 million in severance.
Between 150 and 200 of the MF Global brokerage employees will be rehired to help with winding down the business and processing bankruptcy claims, Giddens said in his statement.
"The termination of employees and closure of operations is a necessary part of the court-ordered liquidation... and is consistent with the trustee's obligations," he said.
The parent, MF Global Holdings, said in a statement that it was "saddened by the trustee's actions today to terminate so many of our colleagues".
Giddens also said on Friday that his team is working to clear out the brokerage's New York offices as soon as possible and rent smaller, less expensive space as the liquidation moves forward.
