Reuters reported that the London Metal Exchange has suspended the validity of 274 steel billet warrants belonging to bankrupt brokerage firm MF Global.

Mr Chris Evans spokesman of LME said in an email statement to Reuters that “The situation has arisen due to the MF administration. The administrator has taken control of the warrants and is unable to adhere to the Lending Guidance. To ensure an orderly market we have suspended the warrants until the situation becomes clearer.”

The exchange stated that since it had reason to believe that the holder of the warrants is not prepared to comply with LME rules on lending guidance, the Warrants will not constitute live warrants for the purposes of calculating dominant positions under the Lending Guidance.

MF Global filed for bankruptcy in the United States after risky bets on debt from troubled euro zone nations scared away clients and investors. The company revealed to regulators that it was short perhaps USD 600 million in customer funds money which the firm was supposed to keep in segregated accounts maintained under a raft of laws and regulations.

(Sourced from Reuters)