Wednesday, 27 July 2016
Last updated 4 hours ago
Mar 26 2014 | 10:08am ET
The trustee for MF Global Holdings can sue three former top executives of the collapsed futures brokerage, including former CEO and New Jersey Gov. Jon Corzine.
U.S. District Judge Victor Marrero refused to dismiss the lawsuit against Corzine, former chief operating officer Bradley Abelow and former CFO Henri Steenkamp. Litigation trustee Nader Tavakoli alleges that the three breached their duties to the bankruptcy company; Corzine and his colleagues argued that Tavakoli was merely second-guessing.
Marrero found that there might be more to it than that.
“Defendants and other MF Global officers repeatedly increased the company’s exposure to risky bets on sovereign debt and shuffled funds among MF Global’s subsidiaries to cover a growing liquidity crisis,” he wrote. “These facts give rise to reasonable inferences that defendants acted in bad faith.”
The judge’s ruling makes Corzine 0-for-4 in seeking the dismissal of lawsuits against him in the matter: Marrero has previously green-lighted litigation filed by the Commodity Futures Trading Commission, MF Global investors and the brokerage’s former customers.