Corzine fails to win dismissal of CFTC's MF Global lawsuit

decrease font size  Resize text   increase font size       Printer-friendly version of this article Printer-friendly version of this article

A federal judge on Tuesday rejected a bid by former MF Global Holdings Ltd Chief Executive Officer Jon Corzine to dismiss a U.S. regulator's lawsuit that claims he played a key role in causing one of the country's biggest bankruptcies ever.

U.S. District Judge Victor Marrero said the Commodity Futures Trading Commission's allegations "give rise to reasonable inferences" that Corzine and former Assistant Treasurer Edith O'Brien illegally transferred money out of customer accounts to stem losses from big bets on European sovereign debt. Marrero did not rule on the merits.

The decision came two months after Marrero denied Corzine's request to dismiss investor litigation seeking to hold him, other executives and many banks responsible for the futures brokerage's collapse.

Corzine's lawyer, Andrew Levander of the law firm Dechert, did not immediately respond to a request for comment.

O'Brien's lawyer, Darren Kinkead of Steptoe & Johnson, did not immediately comment.

A call to the CFTC was not immediately returned.

The CFTC previously settled with the firm's brokerage unit, MF Global Inc, which agreed to return more than $1 billion to harmed customers and pay a $100 million penalty.

MF Global's bankruptcy in October 2011, which left about $1.6 billion of customer funds missing, was one of the 10 largest bankruptcies in U.S. history.

The collapse prompted a wave of litigation, as well as a U.S. Department of Justice probe. No criminal charges have been brought.

Corzine, a former New Jersey governor and U.S. senator as well as a former co-chair of Goldman Sachs & Co, had claimed the CFTC failed to show that he did not adequately oversee the firm and asserted that he was not responsible for directly supervising employees involved in the transfers of customer funds.

In November, James Giddens, the trustee unwinding MF Global's brokerage unit, won bankruptcy court approval for a plan to close the remaining shortfalls and fully repay thousands of former customers.

Corzine and other executives have appealed that ruling, saying it is unfair for Giddens to repay customers and then pursue claims against them to recover those funds.

The case is DeAngelis et al v. Corzine et al, U.S. District Court, Southern District of New York, No. 11-07866. The bankruptcy cases are In re: MF Global Inc, U.S. Bankruptcy Court, Southern District of New York, No. 11-2790; and In re: MF Global Holdings Ltd in the same court, No. 11-15059.


Buyers Guide

Doyle Equipment Manufacturing Co.
Doyle Equipment Manufacturing prides themselves as being “The King of the Rotary’s” with their Direct Drive Rotary Blend Systems. With numerous setup possibilities and sizes, ranging from a  more...
A.J. Sackett Sons & Company
Sackett Blend Towers feature the H.I.M, High Intensity Mixer, the next generation of blending and coating technology which supports Precision Fertilizer Blending®. Its unique design allows  more...
R&R Manufacturing Inc.
The R&R Minuteman Blend System is the original proven performer. Fast, precise blending with a compact foot print. Significantly lower horsepower requirement. Low inload height with large  more...
Junge Control Inc.
Junge Control Inc. creates state-of-the-art product blending and measuring solutions that allow you to totally maximize operating efficiency with amazing accuracy and repeatability, superior  more...
Yargus Manufacturing
The flagship blending system for the Layco product line is the fully automated Layco DW System™. The advanced technology of the Layco DW (Declining Weight) system results in a blending  more...
Yargus Manufacturing
The LAYCOTE™ Automated Coating System provides a new level of coating accuracy for a stand-alone coating system or for coating (impregnating) in an automated blending system. The unique  more...
John Deere
The DN345 Drawn Dry Spreader can carry more than 12 tons of fertilizer and 17.5 tons of lime. Designed to operate at field speeds up to 20 MPH with full loads and the G4 spreader uniformly  more...
Force Unlimited
The Pro-Force is a multi-purpose spreader with a wider apron and steeper sides. Our Pro-Force has the most aggressive 30” spinner on the market, and is capable of spreading higher rates of  more...
BBI Spreaders
MagnaSpread 2 & MagnaSpread 3 — With BBI’s patented multi-bin technology, these spreaders operate multiple hoppers guided by independent, variable-rate technology. These models are built on  more...


Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left


X-TENDED REACH GRAIN CARTS

YOUR BEST HARVEST IS NOW WITHIN REACH J&M introduces their patented line of X-tended Reach grain carts, featuring a frontfolding single ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Feedback Form