UPDATE 4-Corzine, others settle MF Global lawsuit for $64.5 mln

Tue Jul 7, 2015 6:56pm EDT
 
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(Adds preliminary approval of settlement, paragraph 3)

By Jonathan Stempel

NEW YORK, July 7 (Reuters) - Jon Corzine and other former MF Global Holdings Ltd officials have reached a $64.5 million settlement of litigation brought by investors seeking to hold them liable for the now-defunct futures brokerage's 2011 bankruptcy.

The all-cash settlement with Corzine, who was MF Global's chief executive and previously New Jersey's governor, and nine other defendants resolves the last major piece of litigation by MF Global stock, bond and convertible bond investors over the company's rapid descent into Chapter 11.

U.S. District Judge Victor Marrero in Manhattan on Tuesday evening granted preliminary approval of the settlement, which was disclosed earlier in the day. He scheduled a Nov. 20 hearing to consider final approval.

The class action accord would boost the investors' recovery to $204.4 million, including $74.9 million from underwriters and $65 million from the auditor PricewaterhouseCoopers.

Investors led by the Virginia Retirement System and the Canadian province of Alberta accused MF Global officials of inflating the company's ability to manage risk, obscuring risks from Corzine's $6.3 billion bet on European sovereign debt and improperly accounting for deferred tax assets.

Other settling defendants included former Chief Financial Officers J. Randy MacDonald and Henri Steenkamp, and seven former independent directors.

All denied wrongdoing, and their insurers will cover the settlement payments, court papers show.   Continued...