Corzine, banks fail to win dismissal of MF Global lawsuit

Tue Nov 12, 2013 1:45pm EST
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NEW YORK Nov 12 (Reuters) - A federal judge on Tuesday rejected former MF Global Holdings Ltd Chief Executive Jon Corzine's bid to dismiss investor litigation seeking to hold him, former colleagues and several banks responsible for the futures brokerage's collapse.

U.S. District Judge Victor Marrero in Manhattan rejected the defendants' contention that there was no plausible claim that the company's demise, culminating in its Oct. 31, 2011 bankruptcy, resulted from any securities law violations.

"In evaluating the application of the law that defendants argue would allow the outcome they seek at this stage of the litigation, the court's assessment may be simply stated: It cannot be," Marrero said in a 105-page decision.

Plaintiffs led by the Virginia Retirement System and the province of Alberta, Canada, accused MF Global of inflating its ability to manage risk, obscuring risks from European sovereign debt, and improperly accounting for deferred tax assets.

The defendants included Corzine, two former MF Global chief financial officers, several independent directors and many banks, including JPMorgan Chase & Co and Goldman Sachs Group Inc.