Former Federal Bureau of Investigation Director Louis J. Freeh wants a $1 million fee for success securing creditor recoveries in the bankruptcy wind-down of MF Global Holdings Ltd., the failed commodities firm led by former New Jersey Gov. Jon S. Corzine. In a filing Monday with U.S. Bankruptcy Court in Manhattan, lawyers for Mr. Freeh said he brought “instant credibility” when he was assigned to serve as the firm’s Chapter 11 trustee in Nov. 2011, shortly after the firm collapsed under the weight of its large bets on European debt. Mr. Freeh’s lawyers asked for the $1 million in addition to the more than $20 million billed by Mr. Freeh and his legal teams for their hourly work on the case. Mr. Freeh’s hourly rate is $900. More in the Wall Street Journal [...]

In a victory for federal regulators, an administrative judge has found three former executives who worked for Allen Stanford’s now-defunct brokerage liable for fraud and said they should banned from the industry. The ruling comes more than a year after Stanford was sentenced to 110 years in prison for bilking investors through a Ponzi scheme with fraudulent certificates of deposit issued by Stanford International Bank, his bank in Antigua. In her ruling, Securities and Exchange Commission Judge Carol Fox Foelak described as “egregious” the conduct of former Stanford Group Co. chief compliance officer Bernerd Young, former president Daniel Bogar and Jason Green, a former head of the private client group. More on Reuters [...]

Former FBI chief Louis Freeh, the state-appointed trustee in the MF Global bankruptcy case, has asked to be paid another $1 million for winding down the failed brokerage. Freeh already asked for nearly $2 million in fees, but agreed to a slight reduction after the Department of Justice criticized him and his law firm for vague time records. The trustee listed the negotiation with MF Global’s UK subsidiary that resulted in the return of $30 million to the company among the services rendered by him and his team. More on Reuters [...]

An affiliate of MF Global Holdings Ltd. filed a lawsuit alleging 11 banks engaged in anticompetive practices in the $25 trillion credit-default swaps market, including preventing the company from becoming a clearing broker for swaps. MF Global Capital LLC, an arm of the collapsed broker managed by a board liquidating the company, filed a lawsuit in U.S. District Court for the Northern District of Illinois late Thursday alleging the banks “restrained competition” in the lucrative CDS market. MF Global’s move is the third lawsuit filed in the U.S. claiming banks controlled the swaps market inappropriately. It is also the latest sign that companies who say they were hamstrung by banks dominating the market are growing into a credible threat for Wall Street firms still reeling from litigation on everything from mortgage bonds to manipulation of a key interest rate benchmark, Libor, or the London Interbank Offered Rate. More in the Wall Street Journal [...]

By Joseph Checkler
MF Global Holdings Ltd. has struck a deal with J.P. Morgan Chase & Co. ( JPM ) that calls for the bank to pay MF Global a portion of what the bank recovers in the case, a settlement that MF Global’s administrator says avoids “years of costly and complex litigation.” In a Wednesday filing with the U.S. Bankruptcy Court in Manhattan, MF Global laid out settlement terms that call for J.P. Morgan to pay MF Global based on how much it recovers on its claim against the trustee unwinding the company’s brokerage. The higher the amount J.P. Morgan recovers, the higher percentage MF Global gets to return to its creditors. If the amount is higher than $50 million, for instance, every dollar after the $50 million will go to MF Global’s estate. In return, J.P. Morgan would be off the hook for any claims against it in MF Global’s bankruptcy case. The settlement, if approved by Judge Martin Glenn at a hearing currently scheduled for Aug. 22, would bring to an end one of the remaining uncertainties in MF Global’s 21-month-old bankruptcy. More on Nasdaq [...]

Jon Corzine and two of his top executives at defunct commodities brokerage MF Global sought Monday to have dismissed a lawsuit accusing them of hastening the firm’s 2011 collapse. In court papers filed on Monday in U.S. Bankruptcy Court in Manhattan, lawyers for Corzine, former Chief Operating Officer Bradley Abelow and former Chief Financial Officer Henri Steenkamp lambasted allegations that they acted with gross negligence as the company teetered on the brink. Louis Freeh, the trustee that wound down MF Global’s bankrupt parent, filed the lawsuit in April, accusing Corzine of pursuing a high-risk business strategy that culminated in the brokerage’s destruction. More on Reuters [...]

MF Global Inc.’s former customers should get “significantly” increased distributions in coming months, and the goal is still 100 percent recoveries, the failed brokerage’s trustee said. Customers who traded on U.S. exchanges may get distributions starting in early September that would bring their percentage recoveries into “the high nineties” while customers who traded on foreign exchanges may get “in the sixties,” trustee James Giddens said in a statement today. “These further distributions are dependent on final approval of a motion by the trustee to confirm the allocation of property already received,” Giddens said. His projections assume that agreements with MF Global’s U.K. unit and JPMorgan Chase & Co. (JPM) take effect in mid-August. More on Bloomberg [...]

A JPMorgan Chase & Co. (JPM) unit’s $100 million settlement with MF Global Inc. liquidators won court approval, paving the way for the return of more money to the failed brokerage’s former customers. The agreement will allocate $100 million for the return of customer property, according to an order entered today in bankruptcy court in Manhattan. The agreement resolves claims against JPMorgan arising from transfers of customer property in the days before MF Global entered bankruptcy, as well as its actions as one of the brokerage’s primary banks. “The motion is granted in all respects and the settlement agreement is authorized,” U.S. Bankruptcy Judge Martin Glenn said in the order. More on Bloomberg [...]

The highly compensated Wall Street spin machine never ceases to amaze me. Case in point: defending the indefensible Jon S. Corzine. As soon as the Commodity Futures Trading Commission sued the embattled former chairman and chief executive officer of MF Global Inc., the now liquidated brokerage, the spinmeisters mobilized. The CFTC’s gutsy June 27 lawsuit claimed that Corzine failed to “diligently supervise” MF Global and, as the firm’s “control person,” allowed lower-level employees to illegally use more than $1 billion of customer funds to try to stave off MF Global’s Halloween 2011 bankruptcy filing. In truth, Corzine is lucky he isn’t facing criminal charges for overseeing the demise of MF Global. Its creditors lost billions, and 3,000 employees lost their jobs. More on Bloomberg [...]