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MF Global faces class-action suits after bankruptcy
Class Action |
2011/11/07 12:19
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Two class-action lawsuits have been filed against bankrupt brokerage MF Global as customers struggle to recover funds from the first major US casualty of the European debt crisis.
On Saturday, Seattle-based Hagens Berman said it was "investigating whether the company used clients' money to offset losses the company had incurred in failed investments."
It filed a lawsuit in the name of investors who bought MF Global shares between May 20 and October 28 or who bought bonds issued in August.
The complaint charged that MF Global "made false and misleading statements to investors, including failing to disclose the company's reported internal control problems in segregating clients' funds."
Attorney Reed Kathrein said Friday's resignation of the company's chief executive Jon Corzine, whose activities in the last weeks of the failing firm have attracted regulator scrutiny, was "not an encouraging sign."
"As we continue our investigation, we hope to uncover whether the company mixed investors' and company money, and if Corzine himself played a part in that decision," he added in a statement.
Boston law firm Block & Leviton said Friday it had also filed a class-action lawsuit in New York federal court on behalf of MF Global clients over the same period.
It charged MF Global made "certain materially false and misleading statements regarding the Company's internal financial controls and liquidity levels" through its "most senior" officers and directors.
Investors lost some $585 million in market capitalization in the week that preceded MF Global's bankruptcy filings alone, according to Block & Leviton. |
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Class action or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued. This form of collective lawsuit originated in the United States and is still predominantly a U.S. phenomenon, at least the U.S. variant of it. In the United States federal courts, class actions are governed by Federal Rules of Civil Procedure Rule. Since 1938, many states have adopted rules similar to the FRCP. However, some states like California have civil procedure systems which deviate significantly from the federal rules; the California Codes provide for four separate types of class actions. As a result, there are two separate treatises devoted solely to the complex topic of California class actions. Some states, such as Virginia, do not provide for any class actions, while others, such as New York, limit the types of claims that may be brought as class actions. They can construct your law firm a brand new website, lawyer website templates and help you redesign your existing law firm site to secure your place in the internet. |
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