Trustee Sues Corzine Over MF Global Collapse

The trustee overseeing MF Global Holdings Ltd.'s (MFGLQ) bankruptcy sued former Chief Executive Jon S. Corzine and two other executives for their role in the brokerage's collapse.

Trustee Louis J. Freeh on Monday filed a lawsuit in bankruptcy court against Mr. Corzine, the former governor of New Jersey, and former Chief Operating Officer Bradley I. Abelow and former Chief Financial Officer Henri J. Steenkamp.

In the lawsuit, Mr. Freeh, highlighted the alleged "acts and omissions" of the officers that he says "culminated in the business collapse of the company and the bankruptcies of the debtors."

"Defendants, in their capacities as officers, breached their fiduciary duties of care, loyalty, and oversight over the company, and failed to act in good faith," the trustee added.

MF Global, led by Mr. Corzine, collapsed in October 2011. Its bankruptcy initially exposed a $1.6 billion shortfall in U.S. customer accounts, although Mr. Freeh believes all that money is expected to be restored.

MF Global this month won confirmation of its liquidation plan, which describes how the brokerage's holding company will pay its creditors.

Write to Jacqueline Palank at [e-mail].

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