Tag Archives: MF Global

Ambac Financial : Corzine, others settle with MF Global trustee over collapse

Jon Corzine has reached a settlement with the trustee for the former New Jersey governor’s collapsed brokerage MF Global Holdings Ltd, as part of a series of accords expected to provide about $132 million to creditors, according to court papers.

The trustee, Nader Tavakoli, on Wednesday night asked a U.S. bankruptcy judge to approve payments being made on behalf of Corzine and several other defendants, including MF Global’s former Chief Operating Officer Bradley Abelow and former Chief Financial Officer Henri Steenkamp.

Insurers will make payments on behalf of the defendants, who did not admit wrongdoing, the court papers show.

The accord does not resolve the U.S. Commodity Futures Trading Commission’s civil lawsuit against Corzine and Edith O’Brien, a former MF Global assistant treasurer, but provides a reserve to help fund their defenses.

Read on.

MF Global Execs Strike $65M Deal To Settle Investors’ Claims

Law360, New York (July 7, 2015, 1:38 PM ET) — Former New Jersey Gov. Jon Corzine and other former MF Global executives will pay $64.5 million to settle claims that they swindled investors by touting the brokerage’s financial health before its fall 2011 collapse, during which $1.6 billion worth of customer money went missing, according to a Tuesday filing.

Onetime New Jersey Gov. Jon Corzine is among the former MF Global executives who will shell out nearly $65 million to settle claims they lied to investors about the company’s financial stability. (Credit: AP) The proposed settlement…

Source: Law360

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MF Global Settlement With JPMorgan Unit Approved by Judge

MF Global Settlement With JPMorgan Unit Approved by Judge

JPMorgan Chase & Co. (JPM) unit’s $100 million settlement with MF Global Inc. liquidators won court approval, paving the way for the return of more money to the failed brokerage’s former customers.

The agreement will allocate $100 million for the return of customer property, according to an order entered today in bankruptcy court in Manhattan. The agreement resolves claims against JPMorgan arising from transfers of customer property in the days before MF Global entered bankruptcy, as well as its actions as one of the brokerage’s primary banks.

“The motion is granted in all respects and the settlement agreement is authorized,” U.S. Bankruptcy Judge Martin Glenn said in the order.

MF Global Trustee Speaks: It Was All Corzine’s Fault

Via Reuters,

Jon Corzine’s aggressive bets on European sovereign debt while head of the MF Global Holdings Ltd brokerage led to the firm’s dramatic collapse in 2011, according to a report by the bankruptcy trustee.

 

Former FBI director Louis Freeh acknowledged that a slow U.S. economic recovery had played a role in MF Global’s woes, but he said “negligent conduct” contributed to the company’s failure.

 

 

The risky business strategy engineered and executed by Corzine and other officers and their failure to improve the company’s inadequate systems and procedures so that the company could accommodate that business strategy contributed to the company’s collapse,” Freeh wrote in the 124-page report.

 

 

Freeh’s report found MF Global management ignored the hedging recommendations of its chief risk officer, Michael Stockman, and lacked the controls to monitor its cash on a real-time basis.

 

The weak reporting system also prevented the company from knowing that cash from segregated customer accounts was being used to meet margin calls tied to MF Global’s own bets on the sovereign debt of countries such as Portugal and Ireland.

 

“These glaring deficiencies were long known to Corzine and management, yet they failed to implement sufficient corrective measures promptly,” the report said.

 

Freeh’s responsibilities include pinpointing possible legal liabilities of the management, and the singled out the “failures” of Corzine, former chief operating officer Bradley Abelow and former chief financial officer Henri Steenkamp.

 

 

On Friday, U.S. Bankruptcy Judge Martin Glenn will be asked to approve MF Global’s plan of liquidation. General unsecured creditors of the holding company are expected to collect between 14.7 cents and 34 cents on the dollar of what they are owed, according to court documents.

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JP Morgan Chase, MF Global trustee reach $564M settlement

JP Morgan Chase, MF Global trustee reach $564M settlement

JPMorgan Chase announced a $546 million settlement late Tuesday night with MF Global, almost 18 months after the firm’s collapse.

Of that amount, $100 million would go toward customer claims as part of the effort to recover funds lost during the Oct. 31, 2011, failure, effectively resolving the matter between the two financial firms, The Wall Street Journal reported.

Read more: http://thehill.com/blogs/on-the-money/banking-financial-institutions/289191-jpmorgan-chase-mf-global-reach-546m-settlement#ixzz2O3I4WjTK
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Read more: http://thehill.com/blogs/on-the-money/banking-financial-institutions/289191-jpmorgan-chase-mf-global-reach-546m-settlement#ixzz2O3HzxiUW

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MF Global, J.P. Morgan in Deal on Chapter 11 Case

MF Global, J.P. Morgan in Deal on Chapter 11 Case

MF Global Holdings Ltd. (MFGLQ) bankruptcy trustee Louis Freeh struck a deal with J.P. Morgan Chase & Co. (JPM) in their dispute over more than $900 million in intercompany claims, removing one of the key roadblocks to the holding company’s Chapter 11 liquidation plan.

Under the settlement, some $275 million of the more than $1.8 billion that MF Global’s holding company says a c

ompany finance subsidiary owes it will be subordinated, that is ranked below the $1.2 billion owed to a lending group led by J.P. Morgan.

“The settlement is in the best interest of creditors (as) it removes a major hurdle to confirmation of the plan,” said Mr. Freeh in a statement Tuesday.

Read more: http://www.foxbusiness.com/news/2013/03/06/mf-global-jp-morgan-in-deal-on-chapter-11-case/#ixzz2MoKpSTjk

MF Global Trustee Says 28,000 Customer Claims Completed

The trustee liquidating the failed MF Global Inc. (MFGLQ) brokerage said only 200 of more than 28,000 commodities and securities customer claims filed haven’t been completed in the past six months.

“However, the size and timing of future distributions on customer claims remains dependent on the resolution of the major contingencies facing the trustee,” particularly disputes over claims with the brokerage’s U.K. affiliate and parent company, trustee James W. Giddens said yesterday in a report filed in U.S. Bankruptcy Court in Manhattan.

Read on.

Fraud: Jon Corzine, Congress and the 2005 Bankruptcy Reform

Well, the players got played. And we wonder why Congress has the lowest approval rating and trustworthy to the American people?

New York — Yesterday the House Financial Services Committee confirmed what we already know, namely that former Goldman Sachs CEO Jon Corzine deliberately stole customer funds when he was CEO of MF Global.  See Blomberg News story below:

http://www.bloomberg.com/news/2012-11-14/corzine-decisions-felled-mf-glo…

But what the Republican Committee report does not say is that the mechanism that allows Corzine and many others to walk away from such disasters without any civil liability for fraud is the 2005 Bankruptcy Reform Act, which the Republicans sponsored almost unanimously.  And we wonder why nobody is pursuing this for the theft that it clearly involved?

By the bankruptcy code Congress adopted and which congress alone can change: (i) Bankruptcy Judges are PRECLUDED from appointing “receivers” (Sec. 105(b)), (ii) the stay precludes creditors who were robbed from pursuing a receiver at the District Court, (iii) state receiverships are collapsed into the bankruptcy when it is filed and (iv), at least in the 2nd Cir., only a receiver can pursue claims based on theft.

Ergo:  There is almost no way to go after people to collect stolen money in corporations that are subject to the Bankruptcy Code (particularly in NYC).  As one veteran litigator told me yesterday: “AND WE CONSIDER OURSELVES AS A NATION GOVERNED BY “THE RULE OF LAW”?

Read on.

Corzine Tells Judge That Due To Purchase Of 50,000 MF Global Shares Before Bankruptcy, He Must Acquit

Over to the WSJ:

Indeed, the investors’ claim that Mr. Corzine participated in a fraud “makes no sense” because, just two months before the company collapsed, he bought over 50,000 shares of MF Global stock on the open market. His lawyers argue Mr. Corzine’s stock purchase belies the investors’ claim that he sought to defraud them.

As lawyers for the banks that underwrote MF Global’s securities noted, trading firms can go under without fraud.

“Companies sometimes fail because of unsuccessful business strategies,” said lawyers for the underwriters. “However regrettable that reality, courts long have taught that such failures alone do not give rise to claims under the federal securities laws.”

Mr. Corzine’s large bets on bonds of troubled European countries panicked investors and led to the firm’s undoing. As MF Global frantically tried to sell assets and negotiate a rescue deal, the firm dipped into customer funds that aren’t supposed to be touched under federal regulations.

He testified before Congress last year that he was unaware of a shortfall in customer assets at MF Global until hours before its bankruptcy filing.

The Justice Department and regulators at the Commodity Futures Trading Commission and Securities and Exchange Commission have looked into MF Global’s demise to determine if there was any intent to remove money from customer accounts that should have been kept separate from the firm’s own funds under federal rules. To date, neither Mr. Corzine nor others at MF Global have been charged with a crime.

Corzine, Banks Want to Close MF Global Fraud Lawsuit

Jon Corzine’s lawyers say allegations that he fraudulently ran MF Global Holdings Ltd make “no sense” and that a lawsuit seeking to hold him and others responsible for the futures brokerage’s
bankruptcy must be thrown out.

Corzine, former colleagues and several banks, including JPMorgan Chase & Co and Goldman Sachs Group Inc, filed papers on Friday night to dismiss investor litigation over MF Global’s collapse. The company’s Oct. 31, 2011, bankruptcy was Wall Street’s biggest meltdown since 2008.

Plaintiffs led by the Virginia Retirement System and the province of Alberta, Canada, have accused MF Global in the U.S. District Court in Manhattan of inflating its ability to manage risk, obscuring risks from a big bet on European sovereign debt and improperly accounting for deferred tax assets.

But lawyers for Corzine, MF Global’s former chairman and chief executive officer, said there was no securities fraud. They said the allegations merely suggested that Corzine mismanaged the company, was too optimistic, or failed to predict a liquidity squeeze prompted in part by credit rating downgrades.

Read more: http://www.foxbusiness.com/industries/2012/10/22/corzine-banks-want-to-close-mf-global-fraud-lawsuit/#ixzz2A36UUIW6