Published April 23, 2013
Jon Corzine, the former chief executive of MF Global Holdings Ltd , drove the futures and commodities brokerage into collapse by taking excessive risks and ignoring liquidity strains, according to a lawsuit by the company's bankruptcy trustee.
Louis Freeh, the trustee, accused Corzine of breaching his duties to shareholders and failing to act in good faith, causing MF Global under his stewardship to lose well over $1 billion in value prior to its October 2011 bankruptcy.
Freeh filed his lawsuit on Monday night in the U.S. bankruptcy court in Manhattan, fewer than three weeks after accusing Corzine and other officers of "negligent conduct" that led to the collapse.
A spokesman for Corzine was not immediately available for comment.
Also named as defendants were former MF Global President and Chief Operating Officer Bradley Abelow and former Chief Financial Officer Henri Steenkamp.
The lawsuit seeks damages from all three defendants.
MF Global collapsed after markets were spooked by its $6.3 billion bet on European sovereign debt. The company on April 5 won court approval of a plan to liquidate its assets.
The case is Freeh et al v. Corzine et al, U.S. Bankruptcy Court, Southern District of New York, No. 13-ap-01333.
(Reporting by Jonathan Stempel in New York; Editing by Gerald E. McCormick and Sofina Mirza-Reid)