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By Mark Melin, Opalesque’s Chicago-based editor of OFI and OFS.

Critical documents related to MF Global’s financial condition appear to have been delayed for release by the Securities and Exchange Commission (SEC) at an important time just before a MF Global floated a bond offering to professional investors. While possibly a coincidence, approximately the same time the documents in question were finally made public, MF Global professional account holders were beginning to flee the company, leading to an eventual liquidity crisis and the firm’s bankruptcy.

The document in question is MF Global’s Annual Audited Report on Form X-17-A-5. What is critical about this report is that it contained information regarding of MF Global’s risky sovereign debt trades, including some subtle, yet important, details that were not available anywhere else. Had professional investors had this information weeks after the May 31, 2011 initial filing date, as is said to be typically the case with such documents, they may have avoided purchasing what ultimately became worthless MF Global bonds. Here is the critical timeline:

• May 31, 2011: The date the SEC acknowledged receiving MF Global’s 2011 Annual Audit.
• August 2, 2011: MF Global sold $300 million of now nearly worthless bonds to professional investors.......................

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