MF Global Customer Lawsuit Stands—With A Scolding

Feb 12 2014 | 10:21am ET

U.S. District Judge Victor Marrero sounds as though he'd very much like to dismiss a lawsuit against former executives of the collapsed MF Global. But for the second time, he's refused to do so.

Marrero said yesterday that it was 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." But he also blasted the customer lawsuit as "wasteful and rancorous."

The judge dismissed some parts of the lawsuit, criticizing the customers' lawyers for asserting claims that "fly in the face of clear precedent." And, as if that wasn't enough, Marrero blasted both sides for not resolving the matter "in a just and efficient way."

In November, Marrero also refused to dismiss an investor lawsuit against former MF Global CEO Jon Corzine and other executives, similarly reasoning that someone was probably at fault for the "massive train wreck" that was MF Global's failure. And last month, he allowed to stand a Commodity Futures Trading Commission lawsuit against Corzine and former MF Global assistant treasurer Edith O'Brien.

In the customer lawsuit, Marrero dismissed claims that Corzine and O'Brien directly violated the Commodity Exchange Act, but allowed claims that he aided and abetted the violation of the law to proceed. He also threw out the case against auditor PricewaterhouseCoopers and some state-law claims. But the heart of the case—breach of fiduciary duty, negligence and tortious interference with contract and business advantage—remain.


In Depth

Will Liquid Alts’ Performance Sustain Future Asset Flows?

Aug 25 2014 | 10:34am ET

Liquid alternative investment funds saw the highest percentage of capital inflows...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.