Bloomberg News

MF Global Investor Says Corzine Made Misleading Statements

November 07, 2011

(Updates with excerpt from complaint in fourth paragraph. For more news on MF Global, click {EXT3 <GO>})

Nov. 3 (Bloomberg) -- An MF Global Holdings Ltd. investor sued Chief Executive Officer Jon Corzine and the company’s board for allegedly making misleading statements about the firm’s financial condition before its collapse this week.

Corzine, the former governor of New Jersey, and senior officers of MF Global, the futures brokerage operator that filed for bankruptcy on Oct. 31, issued statements touting the company’s internal financial controls and liquidity levels that were “materially misleading or untrue,” according to a complaint filed today in Manhattan federal court.

Joseph DeAngelis, who filed a the lawsuit on behalf of himself and other MF Global shareholders, also named as defendants Henri Steenkamp, the New York-based company’s chief financial officer, and Bradley Abelow, its president.

“Defendants had the power and influence -- and exercised such power and influence -- as to cause MF Global to engage in the unlawful conduct and practices,” DeAngelis alleged. “Each of the defendants is liable as a participant in a fraudulent scheme and course of business that operated as a fraud or deceit on purchasers of MF Global common stock.”

MF Global sought bankruptcy court protection after making bets on European sovereign debt. The firm listed liabilities of $39.7 billion and assets of $41 billion in Chapter 11 papers.

Diana Desocio, a spokeswoman for MF Global, didn’t immediately return a voice-mail message left at her office seeking comment on the lawsuit.

The case is DeAngelis v. Corzine, 11-cv-7866, U.S. District Court, Southern District of New York (Manhattan).

--With assistance from Linda Sandler and Matthew Leising in New York. Editors: Andrew Dunn, Michael Hytha

To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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