A group of Montana farmers have filed a class action lawsuit against MF Global to recover money they claim was stolen from their personal accounts with the New Jersey firm. Defendants in the case include MF Global principals Jon Corzine, Christine A. Serwinski and David Simons; JP Morgan Chase and Co.; and PricewaterhouseCoopers LLP. As you may recall, Corzine was a former governor of New Jersey and served as a U.S. senator.
The Montana farmers claim they had their farms’ segregated accounts raided of thousands of dollars when the brokerage firm MF Global reported $1.2 billion of customer money was missing after it declared bankruptcy last year. The farmers’ money was used to guarantee futures contracts for their grains and cattle sales, as well as to lock in prices for fuel, fertilizer and seeds for coming years’ production.
The farmers’ accounts were supposed to be kept separate from funds deposited by people using MF Global to invest in commodities and international finance markets. The class action lawsuit claims MF Global lost huge sums in bad investments on European government bonds, and tried to cover the losses by stealing from the segregated customer accounts.
PricewaterhouseCoopers audited MF Global’s records and internal controls, while JP Morgan Chase was the firm’s primary banker. Interestingly, JP Morgan had been fined 30 million (British) pounds in 2010 “for failing to protect segregated funds.” The case was filed in Missoula because both the farmers and the Defendants have connections to Missoula County. There are 38,000 potential members of the Plaintiff’s class who allegedly lost money in MF Global accounts. Since the Plaintiffs were unlikely to get their money through the bankruptcy court, they elected to file suit.
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