A Manhattan bankruptcy court rejected a motion on Tuesday by the Commodity Customer Coalition, a non-profit representing former MF Global customers, to depose Jon Corzine, the former CEO of the failed mortgage brokerage.
Judge Martin Glenn said that the CCC did not have the authority to question Corzine because the group is not a direct creditor, adding that the coalition is simply a “’watchdog’ entity with its own independent goals” hoping to question Corzine “in furtherance of its own interests” rather than those of traders whose funds were frozen after the firm collapsed, Yahoo reports.
James Koutoulas, a Chicago-based commodities trader who heads the CCC, said that the court’s reasoning was “the most minute technicality imaginable.”
“I could have filed 10,000 versions of the motion, one on behalf of each customer we represent,” Koutoulas said, adding that the CCC may appeal the court’s decision, according to Yahoo.
MF Global collapsed in October 2011 due to heavy exposure to European sovereign debt. The case has been under investigation by Congress as it seeks to identify the source of the $1.6 billion missing from customer accounts.
Many commodities customers have recovered approximately 80 percent of the value of their accounts. James Giddens, the trustee tasked with finding the money and liquidating the firm’s broker-dealer division, announced last month a settlement with MF Global that could increase customer payouts, Yahoo reports.
The CCC said Corzine should face criminal charges for his role in the company’s failure, though it is not exactly clear what his role was. Giddens said in a report last year that Corzine used customer funds to cover gaps in liquidity as the firm gradually grew into a major global investment business. Corzine, however, has dismissed the claims.
The motion filed by the CCC sought permission to interview a number of other MF Global executives, including CFO Henri Steenkamp, former COO Bradley Abelow, former Treasurer Edith O’Brien, General Counsel Laurie Ferber and Christine Serwinski, the former finance chief at MF Global’s North American brokerage, according to Yahoo.