The following press release is from Anderson, Baker and Swanson, PLLC:
MISSOULA, MT – A group of Montana farmers today filed a class action lawsuit (CLICK HERE TO VIEW COMPLAINT) on behalf of MF Global customers alleging that MF Global’s former officers including Chairman and CEO Jon Corzine, with the help of the Company’s independent auditor, PricewaterhouseCoopers LLP, and its chief banker JPMorgan Chase & Co., improperly raided customer brokerage accounts to meet the firm’s liquidity needs and backstop its souring bets on European sovereign debt instruments. As has been widely reported, more than $1.2 billion in customer funds – supposedly held in trust by MF Global on behalf of its clients – went missing.
The class action was filed in Federal Court in Missoula, Montana on behalf of all United States based clients of MF Global, represented by the Montana law firm of Anderson, Baker & Swanson, PLLC and the California-based, Cotchett, Pitre & McCarthy, LLP.
Tim Johnson, a Montana grain grower, stated: “Our business requires law abiding brokers to price our products and bring them to market. MF Global’s conduct has put this entire model, and the livelihood of all other grain producers, at risk.”
This sentiment was echoed by fellow grain grower, Wade Jacobsen: “This scheme has impacted every part of my business, and bankers are nervous about financing commodities going forward. It is a disaster.”
As alleged in the complaint, many in America’s heartland, including farmers, grain producers, and cattle ranchers, relied on MF Global as their trusted broker to help price and distribute their crops through futures contracts. Customer funds were placed in segregated customer accounts to guaranty their promise to deliver the products they had priced.
As an entity regulated by the U.S. Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC), MF Global was required to maintain and closely monitor the segregated accounts to ensure customer assets were protected, even in the event of MF Global’s insolvency.
However, as alleged, MF Global failed to segregate and maintain their customers’ funds. On October 31, 2011, MF Global declared bankruptcy and the bankruptcy trustee determined that there is a shortfall of as much as $1.2 billion in the segregated accounts, impacting approximately 38,000 customers nationwide. The suit also alleges that PricewaterhouseCoopers, which audited MF Global’s financials and reviewed its internal controls, and JP Morgan, the Company’s primary banker, assisted the fraud and failed to disclose red flags about MF Global’s deviation from regulations governing customer asset segregation.
Mark Baker of Anderson, Baker & Swanson, PLLC said, “This is a suit by the real victims of MF Global. The missing funds were not investments in MF Global, or loans to MF Global, but rather the customer’s own money as collateral to guaranty their contracts. They were not to be used by others – let alone their own broker – to speculate on risky and exotic securities.”
Source: Anderson, Baker and Swanson, PLLC
Posted by Haylie Shipp