By Nick Brown
NEW YORK, Dec 19 (Reuters) - A bankruptcy judge responded on
Wednesday with skepticism to a request by former MF Global
customers to depose the collapsed brokerage's former chief Jon
Corzine.
At a hearing in U.S. Bankruptcy Court in Manhattan, Judge
Martin Glenn said he doubted whether the Commodity Customer
Coalition, a grassroots advocate group for customers hurt by MF
Global's 2011 bankruptcy, had legal standing to subpoena and
depose Corzine and other former executives.
"The coalition is not a creditor" of MF Global even though
it represents customers who are creditors, Glenn said. "It is an
inanimate entity."
Glenn said he would wait to make an official ruling.
MF Global declared bankruptcy in October 2011 after its
heavy exposure to European sovereign debt spooked investors. The
case has become a political fire storm as investigators in
congress and elsewhere try to identify the source of an
estimated $1.6 billion hole in customer trading accounts.
Many officials, including the Department of Justice and the
FBI, have been investigating the case and have spoken to MF
Global executives.
Corzine's role has been unclear, though the former Goldman
Sachs chief executive and former Democratic New Jersey governor
and senator has denied wrongdoing.
James Giddens, the trustee liquidating MF's broker-dealer
unit, said in a June report that Corzine failed to address
growing liquidity needs as he built the firm into a global
investment powerhouse, using customer funds to cover liquidity
gaps as the firm teetered on the brink.
The Commodity Customer Coalition last month sought
permission to depose Corzine, Chief Financial Officer Henri
Steenkamp, former Chief Operating Officer Bradley Abelow,
General Counsel Laurie Ferber, former Treasurer Edith O'Brien,
and Christine Serwinski, former finance chief at MF's North
American brokerage.
The request was opposed by many parties in the case, but
supported by futures industry watchdog the National Futures
Association and by commodities broker R.J. O'Brien.
Glenn said any depositions, if ultimately approved, should
be coordinated with plaintiffs in a separate federal court
lawsuit accusing Corzine of breaching fiduciary duties. Glenn
said he plans to confer next month with the judge in that case
as to whether such discovery is appropriate.
Giddens, whose job is to recover as much money as possible
for customers, has returned about 80 percent of the money in
customer trading accounts, which were frozen when the company
went bankrupt.
Reuters reported in September that prosecutors are close to
wrapping up a criminal inquiry into MF Global's collapse and are
unlikely to file criminal charges.
The liquidation of MF Global's North American brokerage is
In re MF Global Inc, U.S. Bankruptcy Court, Southern District of
New York, No. 11-2790. MF Global's bankruptcy case is In re MF
Global Holdings Ltd, in the same court, No. 11-15059.
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