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MF Global’s bankruptcy trustee sues company’s former CEO

Jon Corzine accused of failing to act in good faith while leading the brokerage

The bankruptcy trustee for broke brokerage MF Global has sued its former CEO, Jon Corzine, for causing the company’s downfall.

Louis J. Freeh, the trustee, filed his complaint in U.S. bankruptcy court in Manhattan, alleging that Corzine and two other senior executives—Bradley Abelow and Henri Steenkamp—did not act in good faith at the helm of the company. This lawsuit comes on the heels of a 124-page report that Freeh published this month, which stated that Corzine, who served as a governor and senator from New Jersey before joining MF Global, invested in bad European debt and ignored flaws in the company’s risk controls.

“In the end, the scale of the company’s trading put pressure on the company’s deficient controls without producing any significantly improved revenues,” the report reads.

Freeh’s lawsuit is seeking unspecified damages and legal fees for Corzine, Abelow and Steenkamp’s role in the eighth-largest bankruptcy in U.S. history.

Read more at Bloomberg.

 

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