Corzine Sued for RICO Violation by MF Global Customers
By Linda Sandler
January 20, 2012, 6:42 PM EST
Jan. 20 (Bloomberg) -- Jon Corzine, MF Global Holdings Ltd.’s former chief executive officer, was sued under U.S. racketeering law by commodity customers alleging he and other executives “unlawfully” took money from their accounts and failed to segregate their money as the law requires.
The suit alleges that hundreds of millions of dollars were transferred from customers’ accounts to other MF Global units, at a time when the company was short of cash and faced calls for collateral as its risky Eurobond and other investments fell in value.
Named in the suit, JPMorgan Chase & Co., the company’s banker, should have noticed the “depletion” of customer money, and should have investigated, according to the plaintiff. The customers are seeking unspecified restitution and damages.
The suit, filed in federal court in Manhattan today on behalf of Robert Marcin and other MF Global segregated account holders by Grant & Eisenhofer PA of New York, is one of at least 10 against Corzine and other MF Global executives. Plaintiffs including the Virginia Retirement System have been competing to lead a consolidated lawsuit seeking so-called class-action status....
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