Former MF Global CEO Jon Corzine and some of his firm executives have been sued by a bankruptcy trustee in the?United States Bankruptcy Court?according to numerous reports.
This includes Corzine?s deputies Bradley I. Abelow, former MF Global chief operating officer, and Henri J. Steenkamp, the former chief financial officer.
The bankruptcy trustee,?Louis J. Freeh, has claimed that Corzine and the others were??grossly negligent? prior to MF Global’s collapse in October 2011. The litigation filing had been initiated on Monday by Freeh and comes a few weeks after he had?agreed to postpone the lawsuit and instead pursue mediation with Corzine, reported The New York Times.?
Steven Goldberg, Corzine’s spokesman, said of the lawsuit, ?We question why the trustee chose to file this lawsuit, which is filled with seriously flawed allegations, while he is participating in court-ordered mediation of these very claims.”
Freeh confirmed on Tuesday that the mediation process is ongoing and that it was ?in the best interests of the Chapter 11 estates to file the complaint.?
A dollar amount for a desired recovery had not been listed in the lawsuit, reported CNN.?
The lawsuit follows a report by Freeh released earlier in the month that had placed blame on MF Global executives for building a ?risky business strategy? and ignoring ?glaring deficiencies? in the firm’s internal controls. In addition, both the report and the lawsuit further dissed the executives for the $1 billion-plus in customer money that went MIA from the investment firm.
Corzine, who is likely spending a lot of time with his attorney these days, hasn’t been charged with any wrongdoing as federal agencies, including the Commodities Futures Trading Commission (CFTC), are still investigating the customer money misuse.
But it doesn’t mean this won’t happen some day. CFTC Commissioner Bart Chilton said Tuesday in a statement via the Associated Press, “Anyone who violates the law, and particularly anyone at MF Global who used a billion bucks of customer cash that should have been protected, should be punished appropriately.”?