Wednesday, July 03, 2013 8:17 pm
Courts OK JPMorgan's settlement with MF Global
By The Associated Press
The settlement was first announced in March, and its approval on Wednesday was largely a formality. Previously, the courts have said the settlement would be worth about $546 million: JPMorgan will pay to reimburse customers, and will also relinquish claims on other funds.
MF Global was the boutique brokerage led by former New Jersey Gov. Jon Corzine that collapsed in 2011 after a disastrous bet on European countries' debt. When it fell, about $1.2 billion in customer money was discovered to be missing, and was later found to have been used to support the firm's trading operations.
JPMorgan had held MF Global funds in several accounts and also processed the firm's securities trades.
James Giddens, the court-appointed trustee overseeing MF Global's bankruptcy, said in a statement he is "extremely pleased with the approval."
Last week, federal regulators sued Corzine, who also once represented New Jersey in the U.S. Senate, alleging that he was responsible for the misuse of customer money while CEO of MF Global. That civil lawsuit brought by the Commodity Futures Trading Commission is one of a number of proceedings related to the firm that is still working through the courts.
Giddens also joined a lawsuit filed by MF Global customers against Corzine and other top executives.
After the firm's customers and creditors have received all their claims, MF Global is slated to pay a $100 million penalty it agreed to as part of a separate settlement also announced last week.
Nearly 90 percent of the money belonging to the firm's U.S. customers has been recovered. Many farmers, ranchers and business owners used futures contracts through MF Global to hedge their risks against fluctuating crop prices. A futures contract allows someone to agree with someone else to buy or sell something - corn, say, or gold - at a set price at some point in the future.
The firm's $41 billion bankruptcy was the eighth-largest in U.S. history.