Bleichmar Fonti & Auld LLP | Complex Litigation Law Firm | BFTA Obtains Final Approval of Settlements in <em >MF Global</em >, $204.4M Recovered for Class
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BFTA Obtains Final Approval of Settlements in MF Global, $204.4M Recovered for Class

November 25, 2015
On behalf of Co-Lead Plaintiffs Her Majesty the Queen in Right of Alberta and the Virginia Retirement System and the Class, Co-Lead Counsel BFTA and Bernstein Litowitz Berger & Grossmann LLP have secured final approval of two proposed settlements in the MF Global litigation: (i) a $65 million partial settlement that fully resolves the class’s claims against MF Global’s former auditor PricewaterhouseCoopers LLP, and (ii) a $64.5 million partial settlement that fully resolves the class’s claims against former officers and directors of MF Global, including former CEO Jon S. Corzine.

Together with an earlier $74.93 million settlement with certain underwriter defendants, Class settlements now total $204.4 million, a significant recovery four years after MF Global’s collapse.  The Company filed for bankruptcy on October 31, 2011, shortly after investors learned that MF Global’s financial stability was at risk, and that over $1.2 billion in customer funds were missing.

Represented by BFTA partners Javier Bleichmar and Cynthia Hanawalt, Plaintiffs led a complex litigation strategy against 24 defendants, consolidated with related litigations and framed by the ongoing bankruptcy of the MF Global estate.  Plaintiffs overcame multiple motions to dismiss in November 2013, when the Honorable Victor Marrero sustained Plaintiffs’ claims in their entirety.  The claims alleged that MF Global misrepresented to the market its risk controls and liquidity position, failed to disclose its overexposure to European sovereign debt, and failed to properly account for its deferred tax assets.

Plaintiffs aggressively pursued the case into discovery over years of intense litigation, reviewing millions of documents from defendants and third parties, and conducting over 50 depositions of former employees of MF Global and other key witnesses, including four days of testimony from MF Global’s former CEO Jon Corzine. 

Kevin Uebelein, AIMCo Chief Executive Officer, on behalf of Co-Lead Plaintiff Alberta, touted the importance of this investor litigation.  “The integrity of the markets ensures a level playing field for all investors and AIMCo is committed to be a leader in ensuring that integrity is maintained,” said Uebelein.  “We are pleased to have secured this settlement on behalf of all applicable investors in MF Global.”

Litigation continues against the remaining underwriters, led by Jefferies LLC, who were responsible for the final $325 million bond offering.  The parties have recently concluded expert discovery and will soon begin the briefing on summary judgment motions.  Judge Marrero granted Plaintiffs’ motion for class certification on October 14, 2015.