Published On: Thu, Feb 13th, 2014

Lawsuit against Former MFGlobal Holding Ltd Moves Forward

Lawsuit against Former MFGlobal Holding Ltd Moves ForwardA lawsuit which was filed seeking to hold the former MF Global Holdings Ltd Chief Executive Officer Jon Corzine and other executives responsible for the brokerage’s collapse was moved forward by a federal judge on Tuesday.

The U.S. District Judge Victor Marrero stated that it was in fact reasonable to infer that someone “did something wrong to set in motion such an extraordinary chain of events causing such extensive harm to so many people and interests.” However Judge Victor Marrero said that the litigation was “wasteful and rancorous.” He also expressed his disapproval of the lawyers for filing the customer’s complaint’s which came “in the face of clear precedent.” He took the decision to dismiss parts of the lawsuit which included the claims pending against the accounting firm PricewaterhouseCoopers.

In a statement made by a Corzine spokesman, the former CEO is very much so pleased that the court had dismissed some of the claims believing that the “discovery in the case will reveal that the remaining claims also are without merit, and that ultimately we will prevail on all counts.” This ruling was the latest by the judge who refused to dismiss the lawsuit over the 2011 collapse of MF Global, which had left about $1.6 billion of customer funds missing and happened to be one of the 10 largest bankruptcies in the history of the U.S.

Last month, Judge Marrero had refused to dismiss a lawsuit by the U.S. Commodity Futures Trading Commission which accused Corzine and former Assistant Treasurer Edith O’Brien of having illegally transferred money out of customer accounts to stem the losses from big bets on the European sovereign debt. Last November the judge also allowed investors in MF Global to move forward with a lawsuit again Corzine, other executives and several banks related to their alleged role in the futures brokerage’s collapse.

The latest ruling where parts of the case were dismissed had come in a lawsuit which had been filed in 2011 by former customers of the broker dealer MF Global Inc. It accused the officials at the brokerage of having violated the Commodity Exchange Act and New York state law, also accusing PwC of having failed to adequately audit MF Global’s internal controls over the customer funds.

Denisha Sahadevan

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Lawsuit against Former MFGlobal Holding Ltd Moves Forward