Henning -Carey Proprietary Trading LLC, a trading firm headed up by two CME Group directors, Charles Carey and Joseph Niciforo, is suing Jon Corzine and several other officers of MF Global for damages they sustained as a result of the MF Global bankruptcy.
Carey is formerly Vice Chairman of CME Group and Chairman of the Chicago Board of Trade prior to the merger of the two Chicago Exchanges.
There are eight named plaintiffs and the suit is seeking class action status to represent similarly situated customers of MF Global.
The suit seeks “compensatory damages in the amounts shown by the proofs to have been lost as a result of the defendants’ conduct, for punitive in an amount equal to three times the compensatory damage award, and for their cost of suit.”
Peter Carey, who is representing plaintiffs along with Edward T. Joyce and Michael Moirano, says, “The trustee has the responsibility to secure as much of the customer funds that he can. He has indicated that he expects even after all of his efforts that there will be a significant shortfall, in the hundreds of millions of dollars of funds, that is what we are seeking from these individuals.”
Peter Carey, cousin of Charles Carey, says that although there are additional losses due to lost interest and trading opportunities, they would likely drop the suit if customers are made whole. He also pointed out the Charles Carey and Mr. Niciforo are removing themselves from any CME Group deliberations on the matter. “[Charles Carey] is proceeding as a customer,” he says.
Moirano says that they are seeking to access monies from the insurance officers and directors of MF Global are required to maintain. He estimates that figure to be $250 million.
Although there is some confusion, even among the exchange, regulators and plaintiff counsel, regarding the size of the shortfall, which the SIPC trustee maintains is $1.2 billion or more, there does not appear to be much hope that customer will be made whole in the liquidation process. The suit states, “Plaintiffs are informed and believe that all of the $1.2 billion in customer funds, or a substantial portion thereof, will not be recovered and returned to MF Global Inc.’s customers.”
COPY OF LAWSUIT