Jon Corzine's aggressive bets on European sovereign debt while head of the MF Global Holdings Ltd. brokerage led to the firm's dramatic collapse in 2011, according to a report by the bankruptcy trustee.

Former FBI director Louis Freeh acknowledged that a slow U.S. economic recovery had played a role in MF Global's woes, but he said "negligent conduct" contributed to the company's failure.

"The risky business strategy engineered and executed by Corzine and other officers and their failure to improve the company's inadequate systems and procedures so that the company could accommodate that business strategy contributed to the company's collapse," Freeh wrote in the 124-page report.

Freeh was appointed by the U.S. Bankruptcy Court in Manhattan to oversee the company's liquidation for the benefit of creditors.

MF Global collapsed into bankruptcy in October 2011, less than two years after former New Jersey governor and Goldman Sachs chief Corzine became CEO. Regulators determined that the firm misappropriated money in customer trading accounts to cover liquidity gaps as it teetered on the brink. Corzine has denied any wrongdoing.

Freeh's report found MF Global management ignored the hedging recommendations of its chief risk officer, Michael Stockman, and lacked the controls to monitor its cash on a real-time basis.

The weak reporting system also prevented the company from knowing that cash from segregated customer accounts was being used to meet margin calls tied to MF Global's own bets on the sovereign debt of countries such as Portugal and Ireland.

"These glaring deficiencies were long known to Corzine and management, yet they failed to implement sufficient corrective measures promptly," the report said.

Freeh's responsibilities include pinpointing possible legal liabilities of the management, and the singled out the "failures" of Corzine, former chief operating officer Bradley Abelow and former chief financial officer Henri Steenkamp.

The three "contributed to the losses suffered by Holdings Ltd and FinCo, which the trustee estimates to be between $1.5 billion and $2.1 billion."

Investors and former customers of MF Global have filed class action lawsuits naming Corzine and others as defendants. Many of those lawsuits have been consolidated in federal court in Manhattan.

On Friday, U.S. Bankruptcy Judge Martin Glenn will be asked to approve MF Global's plan of liquidation. General unsecured creditors of the holding company are expected to collect between 14.7 cents and 34 cents on the dollar of what they are owed, according to court documents.

The case is MF Global Holdings Ltd., U.S. Bankruptcy Court, Southern District of New York, No. 11-15059.