7 banks targeted over MF Global collapse

Pension funds claim banks concealed problems, seek damages for investors

Ripples from the collapse of MF Global are reaching the courtroom, as investors begin the effort to recover their money. A pair of pension funds filed a lawsuit Friday against seven banks that helped the futures brokerage sell bonds, claiming the bonds’ offering prospectuses hid significant problems.

The seven banks listed as defendants include units of Bank of America, Citigroup, Deutsche Bank, Goldman Sachs, Jefferies, JPMorgan Chase & Co and Royal Bank of Scotland. Several officials associated with MF Global, as well as former Chief Executive Jon Corzine, are also listed.

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