These suits, as distinct from the customer's "Where's my money?" suits are going to be tough to win.
Jon Corzine, MF Global Holdings Ltd.’s former chief executive officer, is the defendant in nine lawsuits before a federal judge in Manhattan that are seeking compensation for losses from the company’s collapse.
The plaintiffs, including an electricians’ union, allege that Corzine and other company officials made misleading statements about MF Global’s financial condition before its Oct. 31 collapse. U.S. District Judge Victor Marrero has been combining the cases into one, saying they make similar claims about similar facts and events, and he now has consolidated nine of them, according to a court filing today.
Andrew Levander, a lawyer for Corzine, didn’t immediately respond to an e-mail seeking comment on the suits, which are seeking class-action, or group, status.
Corzine, the former governor of New Jersey, and senior MF Global officers touted the company’s internal financial controls and liquidity levels in statements that were “materially misleading or untrue,” according to a Nov. 3 complaint filed in Manhattan federal court by Joseph DeAngelis on behalf of himself and other MF Global shareholders.
DeAngelis also named Henri Steenkamp, the New York-based company’s chief financial officer, and Bradley Abelow, its president.
‘Power and Influence’
“Defendants had the power and influence -- and exercised such power and influence -- as to cause MF Global to engage in the unlawful conduct and practices,” DeAngelis alleged. “Each of the defendants is liable as a participant in a fraudulent scheme and course of business that operated as a fraud or deceit on purchasers of MF Global common stock.”
MF Global filed for bankruptcy listing $41 billion in assets after making bets on European sovereign debt and getting margin calls. The holding company is the parent of a futures brokerage that is being liquidated in a separate court proceeding. ....MORE