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MF Global's Corzine Sued by Investor Over Collapse

November 4, 2011
In what could be the first of many to come, MF Global Holdings  CEO Jon Corzine and 3 other company executives are being sued by a shareholder over the futures brokerage's collapse, leading to the 10/31/11 bankruptcy filing. The complaint filed Thursday in Manhattan federal court by shareholder Joseph DeAngelis accused the executives of having "continuously touted" MF Global's financial controls and liquidity, despite knowing their statements were false and misleading at the time they were made. The complaint charges that, as problems became known, MF Global's share price plunged, wiping out $585 million of market value in a single week.  The complaint seeks class-action status on behalf of purchasers of MF Global common stock from 5/20/11 to 10/28/11. Also named in the complaint are:  CFO Henri Steenkamp, COO Bradley Abelow and CRO (Chief Risk Officer) Michael Stockman.   The firm, MF Global, was not named as a defendant. U.S. regulators are conducting a broad review of MF Global business practices as they try to track down upwards of $600 million of missing customer money.  MF Global filed for Chapter 11 protection after its bets on European sovereign debt scared away clients, counterparties and investors.  [reuters 11/3/11]