In re MF Global Holdings Inc. Investment Litigation (S.D.N.Y.)
Entwistle & Cappucci LLP serves as court-appointed co-lead counsel in a putative class action on behalf of commodities investors who were deprived of approximately $1.6 billion in cash and assets belonging to them upon the historical collapse of MF Global Inc. (“MFGI”) and its parent MF Global Holdings Ltd. (“Holdings”).
On October 31, 2011, MFGI, a leading futures commission merchant through which investors engaged in commodities transactions on domestic and foreign exchanges, collapsed due to a fatal liquidity shortage. In liquidation proceedings thereafter commenced under the Securities Investor Protection Act of 1970 (“SIPA”), the Trustee appointed to administer the MFGI estate revealed that approximately $1.6 billion in cash and assets deposited by commodities investors had been misappropriated. In fact, during the weeks preceding MFGI’s collapse, the company and its parent Holdings had commingled customer cash and assets with proprietary funds and misdirected customer funds to satisfy proprietary obligations. These defalcations of customer cash and assets violated provisions of the Commodity Exchange Act (“CEA”) and related Commodity Futures Trading Commission regulations governing the segregation of customer property, and constituted the first instance since the CEA was enacted in 1936, that a futures commission merchant collapsed and cash and assets were not available for return to customers.
In May 2012, the Honorable Victor Marrero appointed Entwistle & Cappucci as co-lead counsel to direct an eight firm committee to represent the victimized customers. Since that time, Entwistle & Cappucci has litigated vigorously on behalf of customers in the consolidated multi-district litigation (the “MDL”) arising from the collapse of MFGI and Holdings, in the SIPA proceeding for MFGI and the Chapter 11 proceeding for Holdings, and in multiple appeals by defendants in those proceedings. The firm has also participated in lengthy mediations among the trustees and parties in the MDL.
Working closely with the Trustees for MFGI, to date Entwistle & Cappucci has negotiated settlements approved by the presiding judges in the MDL and SIPA proceedings that have or will result in the return of more than $500 million in value to customers and MFGI’s general estate. The firm continues to pursue litigation against the former directors and officers of MFGI and Holdings, including Chairman and CEO Jon Corzine, and the companies’ auditor PricewaterhouseCoopers LLP.