|
 U.S. District Judge Victor Marrero said that it was reasonable to
infer someone "did something wrong to set in motion such an
extraordinary chain of events causing such extensive harm to so many
people and interests."
But the judge also called the litigation "wasteful and rancorous"
and chastised the parties for failing to come together to resolve
the matter "in a just and efficient way."
The judge also chided lawyers for the customers for filing claims
that "fly in the face of clear precedent." He dismissed parts of the
lawsuit, including claims pending against accounting firm
PricewaterhouseCoopers.
In a statement, a Corzine spokesman said the former CEO is pleased
the court dismissed some of the claims.
"We believe that discovery in the case will reveal that the
remaining claims also are without merit, and that ultimately we will
prevail on all counts," the spokesman said in the statement.
The ruling was the latest by the judge that refused to dismiss a
lawsuit over the 2011 collapse of MF Global, which left about $1.6
billion of customer funds missing and was one of the 10 largest
bankruptcies in U.S. history.
Last month, Marrero refused to dismiss a lawsuit by the U.S.
Commodity Futures Trading Commission accusing Corzine and former
Assistant Treasurer Edith O'Brien of illegally transferring money
out of customer accounts to stem losses from big bets on European
sovereign debt.
The judge similarly in November allowed investors in MF Global to
move forward with a lawsuit against Corzine, other executives and
several banks related to their alleged role in the futures
brokerage's collapse.
The latest ruling came in a lawsuit filed in 2011 by former
customers of broker-dealer MF Global Inc accusing officials at the
brokerage of violating the Commodity Exchange Act and New York state
law.
The lawsuit also accused PwC of failing to adequately audit MF
Global's internal controls over customer funds.
In his ruling, Marerro dismissed claims that Corzine and O'Brien
engaged in direct violation of the Commodity Exchange Act but
allowed the plaintiffs to pursue claims against the executives for
aiding and abetting violations of the law.
[to top of second column] |
He also dismissed some state law claims asserted in the lawsuit
against the defendants. But Marrero declined to dismiss other claims
against the executives including claims of breach of fiduciary duty,
negligence, and tortuous interference with contract and business
advantage.
The judge also dismissed the claims against PwC, saying the
plaintiffs had failed to allege any direct "linking conduct" between
the customers and the accounting firm.
Despite the narrowing of the lawsuit, Andrew Entwistle, a lawyer
at the law firm Entwistle & Cappucci who is representing the
customers, welcomed the decision.
"We are pleased that the customer-specific claims against the core
bad actors here, including Mr. Corzine, have been upheld and we are
reviewing the other aspects of the court's decision as Judge Marerro
invited us to do," Entwistle said.
An attorney for O'Brien did not immediately respond to a request for
comment. A spokesman for PwC had no immediate comment.
The ruling comes after prior settlements in the litigation. Last
year, JPMorgan Chase & Co agreed to a $546 million settlement to
resolve claims by MF Global's trustee and customers in the class
action.
Exchange operator CME Group Inc has meanwhile agreed to pay $14.5
million to resolve customer claims in the class action. A hearing
for final approval of the settlement is scheduled for March 14.
The case is Deangelis v. Corzine, U.S. District Court, Southern
District of New York, No. 11-07866.
(Editing by Meredith Mazzilli and
Christopher Cushing)
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