MF Global, headed by former New Jersey Senator and Goldman Sachs CEO Jon Corzine, filed for bankruptcy yesterday, but reports that $700 million is missing has spooked creditors and others on Wall Street,  reports DealBook's Azam Ahmed. Best case scenario, the "missing money" is just sloppy "internal controls," but worst case scenario, the financially unstable MF Global diverted customer funds to back its own trades. Either way, the news has made MF Global's chance for survival dim, report DealBook's Ben Protess, Michael J. De La Merced and Susanne Craig. "Customers' funds must be kept separate from company money," they write. "One of the basic duties of any brokerage firm is to keep track of customer accounts on a daily basis." For now, neither Corzine or MF Global have been accused of anything, but the firm has been suspended from trading on the London Mercantile Exchange and futures market CME Group, reports the San Francisco Chronicle

Yesyerday the market closed down 276 points, on fears that the trouble at MF Global would spread to other firms, explains Ahmed. "With MF Global filing for bankruptcy on Monday, investors pummeled many financial stocks, fearful that problems were lurking on the books of other Wall Street firms," he writes. "It was a crisis of confidence, not unlike in 2008 when the markets punished stocks on mere speculation of trouble." But it might not be as bad as 2008, MF Global's rocky status didn't have the same effects as the Lehman Brothers debacle, explain The Wall Street Journal's Mike Spector, Jacob Bunge and Aaron Lucchetti. "The ripple effects from MF Global's collapse were far less dire, though customers and traders who buy and sell stocks, commodities and other investments through the New York company scrambled to move their business elsewhere."