| Court: | United States District Court for the Southern District of New York |
| Case Number: | No. 1:11-cv-07866-VM |
| Case Leaders: | Salvatore J. Graziano, Hannah Ross |
On January 20, 2012, the Court appointed the Virginia Retirement System to serve as Co-Lead Plaintiff in this securities class action on behalf of investors who purchased the publicly traded securities of MF Global Holdings Limited (“MF Global” or the “Company”), and appointed Bernstein Litowitz Berger & Grossmann LLP as Co-Lead Counsel.
The case arises out of the collapse of MF Global – formerly a leading brokerage firm offering customized solutions in global cash, derivatives, and related markets – and concerns a series of materially false and misleading statements and omissions about MF Global’s business and financial results.
The Action Has Been Resolved Through Five Separate Settlements
Five separate settlements have resulted in an aggregate total recovery of $234.3 million for investors in MF Global Securities.
On June 26, 2015, the Court finally approved partial settlements that Lead Plaintiffs reached with certain Underwriter Defendants for $74 million on behalf of the Underwriter Settlement Class and with defendant Commerz Markets LLC for $932,828 on behalf of the Commerz Settlement Class.
On November 25, 2015, the Court finally approved two additional partial settlements that Lead Plaintiffs reached with PricewaterhouseCoopers LLP (“PwC”), the outside auditor of MF Global, for $65 million on behalf of the PwC Settlement Class, and with certain officers and directors of MF Global (the “Individual Defendants”) for $64.5 million on behalf of the Individual Defendant Settlement Class.
On July 15, 2016, the Court finally approved a settlement for $29,825,000 in cash with the Remaining Senior Notes Underwriter Defendants (underwriters of MF Global’s 6.25% Senior Notes due August 8, 2016), who were the final remaining defendants in the action, on behalf of the Remaining Senior Notes Underwriter Class.
Further information about each settlement and the class definition for each settlement, can be found in the applicable Notice. The Notices are available on the Case Documents page or the website established for the settlements, www.MFGlobalSecuritiesClassAction.com.
The MF Global Securities that are eligible to participate in one or more of the Settlements are:
- MF Global common stock (including shares acquired through the MF Global Ltd. Amended and Restated 2007 Long Term Incentive Plan or the MF Global Ltd. Employee Stock Purchase Plan) (CUSIP 55277J108);
- MF Global’s 9% Convertible Senior Notes due June 20, 2038 (CUSIP 55276YAB2);
- MF Global’s 1.875% Convertible Senior Notes due February 1, 2016 (CUSIP 55277JAA6);
- MF Global’s 3.375% Convertible Senior Notes due August 1, 2018 (CUSIP 55277JAB4); and
- MF Global’s 6.25% Senior Notes due August 8, 2016 (CUSIP 55277JAC2).
The claims administration was completed in May 2018. On October 5, 2018, the Motion for Approval of Distribution Plan was filed. On October 30, 2018, the Court entered the Order Approving the Distribution Plan. The first distribution of the net settlement fund occurred in December 2018. The second distribution occurred in February 2021. The third distribution occurred in April 2022. The fourth distribution will occur in the second half of 2024.
For more information about the Settlements you may visit www.MFGlobalSecuritiesClassAction.com.
Background
The gravamen of the case was that, at all relevant times, the Defendants concealed from the investing public that (a) MF Global’s financial statements were not presented in accordance with Generally Accepted Accounting Principles; (b) MF Global’s SEC filings and other public statements materially misrepresented and failed to disclose the risks posed by the Company’s enormous investments in European sovereign debt conducted through repurchase-to-maturity transactions; and (c) MF Global systematically violated its internal controls, including by misappropriating approximately $1.6 billion from MF Global’s segregated customer accounts.
On October 25, 2011, MF Global announced disappointing results for the fiscal quarter ended September 30, 2011. Specifically, the Company reported a net loss of $191.6 million, including a $119.4 million allowance against deferred tax assets recorded in connection with operations in the United States and Japan. In addition, MF Global finally disclosed the true risks associated with its exposure to European sovereign debt through repurchase-to-maturity transactions. On this news, MF Global’s common stock declined approximately 48%, and its debt securities also declined significantly. In the following days, MF Global’s credit ratings were reduced to “junk” status. On October 28, 2011, the New York Stock Exchange halted trading in MF Global’s common stock. On October 31, 2011, MF Global filed for Chapter 11 bankruptcy. Subsequently, MF Global’s debt securities defaulted. Numerous criminal and civil investigations into the collapse of MF Global ensued.