MF Global Inc. futures customers are competing to lead a lawsuit against Jon Corzine, the parent company’s former chief executive officer, over the alleged theft of $1.2 billion of their assets.
Court filings show at least seven actions against Corzine by futures customers in Manhattan federal court. Plaintiffs who’ve nominated themselves to lead a potential group suit include Sapere CTA Fund LP, which sued Corzine and other former MF Global Holdings Ltd. (MFGLQ) executives for $90 million; Seattle money manager William Fleckenstein along with Kay P. Tee LLC, a firm with a trading account at MF Global; and, together, Davide Accomazzo and Roberto Calle Gracey, who said in court papers they filed the first action on behalf of futures customers.
Futures customers currently are trying to persuade a judge that their suits shouldn’t be consolidated with an investor suit led by the Virginia Retirement System. While investors allege that Corzine made misleading statements that inflated the prices of MF Global securities, futures customers allege that he and other executives misappropriated customer funds, according to court papers.
Even the defendants and the laws they are alleged to have violated are different, lawyers for Kay P. Tee said in a letter filed in court yesterday. Investors allege securities fraud, while futures customers file claims under commodity and U.S. racketeering law, they said. Exchange CME Group Inc. and JPMorgan Chase & Co., banker to MF Global, are named in futures customer suits, they said.
Andrew Levander, a lawyer for Corzine, didn’t immediately respond to an e-mail seeking comment on the lawsuits.
U.S. District Judge Victor Marrero has been combining the investor cases into one, saying they make similar claims that Corzine and other company officials made misleading statements about MF Global’s financial condition before its Oct. 31 Chapter 11 filing.
The Virginia Retirement System, chosen by Marrero to lead the investor suit together with Canada’s Province of Alberta, said in a filing the two together lost more than $19 million on MF Global stock and debt.
MF Global filed the eighth largest U.S. bankruptcy listing $41 billion in assets after making bets on European sovereign debt and getting margin calls. The holding company is the parent of a futures brokerage that is being liquidated in a separate court proceeding.
Corzine and MF Global also have been sued by former employees. A trustee liquidating the MF Global brokerage has returned about $3.8 billion to customers after calculating that $1.2 billion or more is missing from their accounts. Corzine has said he doesn’t know where the missing money is and didn’t authorize any misuse of customer money that may have occurred.
The main investor case is DeAngelis v. Corzine, 11-cv-7866, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporters on this story: Linda Sandler in New York at email@example.com