THE former chief executive of failed broker MF Global has been warned he could face legal action.
James Giddens, trustee for the broker-dealer unit, said he may bring civil claims against Jon Corzine and other former MF Global executives for negligence and breach of duties to customers. Giddens also said he was prepared to sue JPMorgan Chase, one of MF Global’s main banks, if he and the bank could not settle within 60 days claims that the bank played a role in the disappearance of customer funds. So far JPMorgan has returned $89m of customer funds and $518m of general MF Global assets, the report said. Giddens has estimated that $1.6bn disappeared from customer accounts when the company, which filed for bankruptcy on 31 October 2011, improperly mixed client funds with its own money.
Yesterday a spokesman for Corzine said: “We simply do not agree with the trustee’s suggestion that Mr Corzine was negligent or there is any basis to sue him.”
Former assistant treasurer Edith O’Brien and chief financial officer Henri Steenkamp could also be targeted. Their lawyers could not be reached yesterday and JP Morgan declined to comment.