U.S. judges okay JPMorgan $546 million settlement with MF Global trustee, customers

Wed Jul 3, 2013 4:08pm EDT
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By Nate Raymond

NEW YORK (Reuters) - Customers of MF Global's MF.MU failed broker-dealer unit and the trustee overseeing its liquidation won court approval on Wednesday for a $546 million settlement with JPMorgan Chase & Co (JPM.N: Quote).

The settlement, announced in March, resolved claims levied by James Giddens, the trustee winding down MF's broker-dealer unit MF Global Inc, and by the broker's former customers, who are pursuing a federal class action over MF Global's collapse in 2011.

MF Global, the commodities brokerage headed by ex-New Jersey Governor Jon Corzine, filed for bankruptcy amid concerns by investors about its exposure to $6.3 billion in sovereign debt.

Approval of the JPMorgan settlement comes a week after the Commodity Futures Trading Commission sued Corzine over the collapse and announced a $100 million settlement with MF's broker-dealer.

At a rare joint hearing in Manhattan, U.S. Bankruptcy Judge Martin Glenn, who is overseeing the liquidation, and U.S. District Judge Victor Marrero, who presides over the class action, approved the JPMorgan accord.

"I find the proposal fair, reasonable and in the best interests of the class," Marrero said.

Giddens has said the settlement will allow him to eventually return 100 percent of customers' money, which was frozen when MF Global went bankrupt. Most customers have already recovered around 90 percent of their funds.

JPMorgan had been the lead on a $1.2 billion revolving credit facility to MF Global's parent and one of its primary clearing banks leading up to its bankruptcy.   Continued...

A sign stands in front of the JPMorgan Chase & Co bank headquarters building in New York, March 15, 2013. REUTERS/Lucas Jackson