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CFTC Files Claim in MF Global liquidation

By Michael P. Tremoglie | Jun 5, 2012


WASHINGTON (Legal Newsline) - The Commodity Futures Trading Commission filed a general creditor claim in the liquidation of MF Global on Friday.

Meanwhile, the MF Global liquidation trustee in the bankruptcy, James W. Giddens, says he may file a lawsuit against Jon Corzine, the company's former CEO.

Giddens was selected by the Securities Investor Protection Corporation and appointed by the U.S. District Court for the Southern District of New York. He is chair of the Corporate Reorganization and Bankruptcy Group for the New York law firm of Hughes Hubbard.

The Associated Press reported Monday that Giddens said in a bankruptcy court filing Monday that he may sue Corzine for breach of fiduciary duty and negligence. He said his investigation found that Corzine led the "company to trade in unsafe securities and take on far greater risk than comparable companies did."

Corzine, a Democrat, was also the former governor of New Jersey and the U.S. Senator from that state. He was also the former CEO of Goldman Sachs.

CFTC's claim was filed the as part of its Division of Enforcement's ongoing investigation related to the failure of MF Global. The CFTC claim would not have priority over customer claims. It was filed to ensure that there will be all possible options available for recovering funds for the benefit of commodity customers in the event the investigation results in an enforcement action against MF Global.

The CFTC said it, "could pursue a restitution award for the benefit of commodity customers, which in turn could be the basis for a Commission claim as a general creditor against the MF Global, Inc. estate."

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