Former New Jersey Mayor May Face Breach of Fiduciary Duty Lawsuit
Posted on Jan 01, 2016
In a recent bankruptcy court filing, trustee James Giddens stated that he may bring a breach of fiduciary lawsuit against former New Jersey Governor Jon Corzine. The trustee is seeking to recover $1.6 billion in customer money following the failure of brokerage firm MF Global. Mr. Corzine took over the firm as CEO in March 2010, after losing his run for re-election as governor of New Jersey in 2009. He was formerly the CEO of Goldman Sachs.
Following an investigation, Mr. Giddens alleges that:
- Mr. Corzine led the company to trade in unsafe securities.
- Under the leadership of Mr. Corzine, the company took on substantially more risk than other companies of the same size and in the same industry.
- Less than two years after Mr. Corzine signed on as CEO, the company filed for bankruptcy.
- The business of MF Global “dramatically changed” after Mr. Corzine took over.
- Mr. Corzine personally directed that the company trade in European debt securities, which was a very risky decision that ultimately failed.
- $1.6 billion was discovered as missing from client accounts following the failure.
- The company never had sufficient capital to support Mr. Corzine’s plans to turn it into a global economic powerhouse.
- The company lacked a sufficient Treasury Department and technology infrastructure in order to support global money management and liquidity.
The trustee may bring this breach of fiduciary duty action against Mr. Corzine because he blames the actions of management, including their lack of sufficient monitoring, for the loss of customer property.
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