MF Global Trustee Sees Possible Lawsuit Against Corzine

 Former MF Global Chairman and CEO Jon Corzine (C) and his attorney Andrew LevanderThe trustee liquidating MF Global Holdings issued a blistering report on Monday about how former Chief Executive Jon Corzine ran the broker-dealer and said he saw possible civil claims against top executives for breach of duties to customers.

In a written report to the U.S. Bankruptcy Court in Manhattan, trustee James Giddens said liquidity at the commodities firm had been a concern long before MF Global tumbled into bankruptcy last October.

Yet before and throughout Corzine's tenure as CEO, "systems and tools that would enable accurate real-time monitoring of liquidity were never implemented," Giddens concluded.

The trustee said he had been in discussions with customers' lawyers about legal action against former MF Global managers and others. He said his report drew no conclusions about possible criminal liability.

Giddens had earlier said he was mulling filing claims against certain executives, but did not name them. Monday's report identifies Corzine, as well as former Chief Financial Officer Henri Steenkamp and former Assistant Treasurer Edith O'Brien, as possible targets for civil claims.

A spokesman for Corzine had no immediate comment. Lawyers for Steenkamp and O'Brien were not immediately available.

The report serves as a status update on Giddens' efforts to recover money for customers who lost funds when MF Global collapsed. Giddens has estimated that about $1.6 billion disappeared from customer accounts when the company improperly mixed client funds with its own money.

Giddens also said he was prepared to litigate against JPMorgan Chase, one of MF Global's main banks, if unable to reach a settlement within 60 days. That dispute centers on claims over whether the bank played a role in the disappearance of customer funds.

JPMorgan has already returned about $89 million in customer funds and $518 million in general MF Global assets, Giddens' report said.

Giddens said he was also in negotiations to recover $175 million controlled by CME Group, MF Global's primary regulator. The money consists of property posted by MF Global's broker-dealer unit, against which some customers and other parties have asserted claims, according to the report.

Officials from JPMorgan were not immediately available. CME had no immediate comment.

The report also revealed that Giddens is investigating the actions of Bank of New York Mellon in the week leading up to MF Global's collapse. So far, the bank has cooperated with the investigation, Giddens said.

The trustee said he would probably not pursue legal claims against customers.

 Former MF Global CEO Jon Corzine and his attorney Andrew Levander. Getty Images

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Where are the Bruce Watson and AOL/HuffPuff personal attacks when you need them?

They spend all their time trying to prop up Obama by personally attacking Romney.

And yet here we have someone who deserves to be attacked ... and because he is a leading Democrat, nothing ... silence ...

Corzine is Richer than Romney. (He was a Goldman Sachs big shot, and made about $400 Million alone from the Goldman IPO.)

Corzine was a HuffPuff Blogger, a far-left Politician, a DEMOCRAT Senator, a DEMOCRAT governor, from a DEMOCRAT state, an OBAMA booster.

He is the worst example of the "one-percent" "Wallstreet insider", and now he is involved in the most OUTRAGEOUS taking and loss of customer money in Wallstreet history. Over a Billion dollars in customer money disappeared!!!! Where are HuffPuff and other lefty propaganda "media"s calls for a CRIMINAL INVESTIGATION?

So where is Bruce Watson? Where is HuffPuff Post? Where are the excoriations of this DEMOCRAT - OBAMA politician?

June 05 2012 at 1:15 AM Report abuse +3 rate up rate down Reply

So much about Obama's transparent Government...
I guess this is the new reason to keep all of the fast and furious documents under raps..

As the Watergate break-in nears its 40th anniversary, the Justice Department has filed a brief in federal district court opposing a historian’s bid to unseal records that would shed light on one of the scandal’s last remaining mysteries: what was overheard on the illegal wiretap that led to the resignation of President Nixon.

June 04 2012 at 8:01 PM Report abuse +2 rate up rate down Reply

Benjamin Franklin once proposed that elected officials not be paid for their service to the nation -- a proposal that was quickly struck down by other representatives.

However, it must be said that during the recent recession, members of Congress did conform somewhat to the idea of "austerity" and quietly declined their annual salary bump for the second year in a row.

Regardless, members of Congress have continued to see their wealth grow. Many saw their fortunes increase by millions of dollars. The combined minimum net worth of this year's 50 wealthiest lawmakers was $1.6 billion, over $200 million more than last year's (2010) group.

June 04 2012 at 4:55 PM Report abuse +4 rate up rate down Reply

Can someone give us the quotes from Obama and Biden praising this guy ?

June 04 2012 at 3:45 PM Report abuse +4 rate up rate down Reply
1 reply to marine1942's comment

Obama and Biden edorsed this guy, and all of his malfesance.

June 04 2012 at 4:28 PM Report abuse +4 rate up rate down Reply

"Bad News for Disgraced MF Global Exec"

I guess he's no longer being considered to be the next Treasury Secretary, and Gaffe Biden is no longer praising him as an investment/economic genius. Looks like yet another OOPS for the Keystone Kops!

June 04 2012 at 3:39 PM Report abuse +5 rate up rate down Reply

Corzine probably would've have had to dip into and steal all of his investors money had he done his homework and found diamonds in the rough such as Discovery Labs (DSCO). Why not do an in-depth research report on both why Discovery Labs isn't moving and why now is the perfect time to both invest in Biotechs and DSCO? They have been major M&A targets the past Spring, and I don't see that stopping in the near future.

Received FDA approval for 1 of its drugs, SURFAXIN, and its nebulizer Affectair on March 5th of this year. PPS Spiked at 5.39 until a week later, a secondary offering of 16 million shares @2.80 was submitted, killing the momentum from the FDA approval and leaving it in the doldrums where it sits today, lagging behind companies with only ONE drug and deeply in the red like Seattle Genetics SGEN, currently trading at over 19. DSCO is slated to have it's distribution pipeline for its infant RDS (Respiratory Distress Syndrome) drug out by the end of the year, with EU approval next year. Trading at currently 2.52, this stock could be the steal of the year, and can actually beat Bank of America (before the crises) as comeback stock or Stock of the Year. The volume is currently dismal as longs have rooted into their positions and currently not selling. Check it out and do your own due diligence.

June 04 2012 at 3:28 PM Report abuse +1 rate up rate down Reply

Who cares??? Nothing will happen to him nor will anyone go to prison.
Just like our elected servants who commit crimes out in the open with no punishment as it is legal for them to do so. And lets not forget that they also make up their own laws that gives them the right to do so.

Then we have Politicians who commit crimes out in the open because its legal for them to do so like:
Nancy Pelosi Blocked Credit Card Reform While Investing Millions in Exclusive Visa Stock Offering

Former Speaker of the House–and current Minority Leader–Nancy Pelosi apparently bought $1 million to $5 million of Visa stock in one of the most sought-after and profitable initial public offerings (IPO) in American history, thwarted serious credit card reform for two years, and then watched her investment skyrocket 203%.

June 04 2012 at 3:26 PM Report abuse +3 rate up rate down Reply

Most of the Democrats in office now are a prime example of what happened when the Government cut most of the funding to the mental health agencies. Instead of being locked up now they are running this country..

June 04 2012 at 3:19 PM Report abuse +6 rate up rate down Reply

Government servants..
The greatest treat to the tax payers:

Rita Crundwell, the comptroller and treasurer of the small Illinois town of Dixon, was arrested Tuesday on charges of embezzling $33.2 million from city coffers, the Chicago Tribune reports.

Crundwell, who is also a championship horse breeder, reportedly bought more than $300,000 worth of jewelry with the money, but sank most of it into running her horse breeding business, Meri-J Ranch, including a $2.1 million motor home, according to International Business Times. In fact, her successful horse business, which boasts 52 champion horses on its website, may have served as a cover for her alleged criminal activity. Plus

Nearly 100 high-ranking General Services Administration employees assigned to work from home reportedly still spent $750000 on travel

I guess going to the store for beer and chips adds up when your sitting at home doing nothing but watching cartoons on the tax payers dime...

June 04 2012 at 3:18 PM Report abuse +1 rate up rate down Reply

Democrats regard the law not as the skeleton of society, but only as a tool for rewarding friends and punishing enemies. Therefore laws are applied selectively. This is why immigration laws are not enforced, and why even brazen criminals like Charles Rangel continue to sit in Congress rather than face the prison time they so richly deserve.

June 04 2012 at 3:13 PM Report abuse +5 rate up rate down Reply