Update: And it just did. BOSTON (MarketWatch) — MF Global Holdings filed for Chapter 11 protection in a New York bankruptcy court early Monday, in the wake of news that the Federal Reserve Bank of New York had suspended business dealings with the troubled broker-dealer.

NEW YORK (Reuters) – Troubled brokerage MF Global Holdings Ltd was nearing a deal late on Sunday night to file for bankruptcy protection and sell assets to Interactive Brokers Group , media reports said.

Join the iFX EXPO Asia and discover your gateway to the Asian Markets

As per a tentative plan, MF Global’s holding company would file for bankruptcy protection and derivatives trader Interactive Brokers would buy the assets, the Wall Street Journal and the Financial Times reported.

Interactive Brokers would likely make an initial bid of about $1 billion during a court supervised auction, the Journal said.

MF Global, the U.S. futures brokerage run by former Goldman Sachs Chief Executive Jon Corzine, has been struggling over the past week in which it posted a quarterly loss, its shares fell by two-thirds and its credit ratings were cut to junk.

Read the rest here.

Click here to access your latest copy of the Forex Magnates Retail Forex Industry Report.