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Stories of Interest
- Banca IMI Securities to Pay $35Mn for Improper Handling of ADRs in Continuing SEC Crackdown
- Members of White House ‘Arts Panel’ Resign En Masse in Protest of Trump
- FINRA Whiffs on Disciplinary Sanction: Bill Singer's 'Negligent Market Manipulation in OTC Stock Promotion'
- Heather Heyer’s Mother Says, ‘I’m Not Talking to the President’
- Goldman Sachs May Have Lost $100Mn on Energy Bet Gone Wrong
- SEC Drops Case Against Ex-JPMorgan Traders Over 'London Whale'
- Financial Advisers That Invest in Technology Need to Accomplish These Two Things
- FINRA Amends Codes Regarding Expedited Arbitrator List Selection
- FINRA July 2017 Quarterly Disciplinary Review (Podcast)
- Senior Exec in Citigroup's Equities Unit Has Left
- Prudential Plotting its Escape From Fed's Tough Oversight
- Why CEOs Spurned Trump's Business Councils, in Their Own Words
- A Stockbroker, Her LLC, and Her Customers' Loans (Or Investment?) - Bill Singer
- Brian Quintenz Sworn In as CFTC Commissioner
- A Gary Cohn Resignation Would 'Crash the Markets' – Mgmt Guru Jeffrey Sonnenfeld
- Trading Firm DRW to Buy RGM Advisors - As Low Volatility Forces Out Weak HFT Players (subsc reqd)
- Reputational Damage - Rajat Gupta on Hard Road to Recovery
- 7th Circuit Affirms Spoofing Conviction - Bill Singer
- Wells Fargo Announces Board Changes
- Judge Rules Against Ex-Goldman Employee in Fed Leak Case
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NEWSLETTERS & ALERTS
PwC Settles $3Bn MF Global Malpractice Lawsuit
The $3 billion negligence trial filed by MF Global Holdings against its former accounting firm, PricewaterhouseCoopers, was settled just 2 weeks into testimony. Terms of the settlement were not disclosed.
Nader Tavakoli, the administrator for bankrupt MF Global Holdings, had sued PwC for $3 billion in damages, alleging that negligence by the firm's accountants led to confusion about the then-current financial health of MF Global. That 'bad' advice allegedly served as Jon Corzine’s ‘go ahead’ to have the firm invest $6.3 billion in speculative European sovereign debt. Corzine was Chairman and CEO of MF Global at the time.
Volatility in the markets, along with news about the firm’s large tenuous investment and its surprise tax write-down, led to market concern about the firm’s ability to survive. A downgrade in its credit rating ensued and ultimately led to the firm’s collapse in October 2011. For his part, Jon Corzine testified earlier in the trial that the debt instruments were low-risk and that the firm expected repayment on its investments.
That said, in January, Mr. Corzine agreed to pay $5 million and accept a lifetime ban to settle CFTC charges pertaining to MF Global’s transactions and its ultimate collapse. For PwC, which throughout the trial denied any wrongdoing, this is its second settlement pertaining to MF Global. In April 2015, the accounting firm entered into a separate $65 million settlement with MF Global investors.
With this settlement, the MF Global administrator has completed his collection efforts on behalf of the bankrupt firm and will be in a position to close out with the firm’s creditors.