Faruqi & Faruqi, LLP Announces Investigation of MF Global (MFGLQ.PK)
Faruqi & Faruqi, LLP, a national law firm concentrating on investor rights, consumer rights and enforcement of federal antitrust laws, is investigating potential wrongdoing at MF Global (“MF” or the “Company”) (formerly NYSE: MF, now OTC: MFGLQ.PK). Faruqi & Faruqi, LLP seeks to determine whether MF violated federal securities laws in connection with statements made to the Company's shareholders.
The investigation focuses on whether MF violated federal securities laws by failing to disclose that: (1) MF was suffering from dire liquidity pressures based on the Company’s exposure to sovereign debt from Belgium, Ireland, Italy, Portugal and Spain; (2) the Company's internal controls were abysmal and failed to clearly separate client funds from MF’s company funds; and (3) MF's true risk profile would inevitably lead to a credit rating downgrade.
On October 25, 2011, MF shocked the market with the release of extremely disappointing results for the third quarter of 2011. The Company incurred losses of $191.6 million chargeable to common shareholders. MF CEO Jon Corzine acknowledged responsibility for the shift in strategy’s failure on an earnings call with analysts: “on a personal note, our positions and the judgment about risk-mediation steps are my personal responsibility, and a prime focus of my attention.”
Then, on October 26, 2011, the firm appointed U.S. financial services group Evercore to oversee the possible sale of its trading operations. The firm’s share price fell 48% to $1.86 on the news, its sharpest ever one-day percentage drop. On October 27, Moody’s Investor Service and Fitch Ratings slashed MF’s credit rating to “junk” status.
Then, on October 31, 2011, MF filed for Chapter 11 bankruptcy. According to the CME Group Inc., MF failed to keep its customers’ accounts separate from the firm’s funds. On November 4, 2011, MF announced the resignation of Corzine as the Company’s CEO. By this point, MF shares were trading at $0.232 – a precipitous decline from $3.55 on October 24.
If you purchased MF securities between April 20, 2011 and October 28, 2011 and you would like to discuss your legal rights, contact us by calling Anthony Vozzolo or Richard W. Gonnello toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to email@example.com or firstname.lastname@example.org. Faruqi & Faruqi, LLP also encourages anyone with information regarding MF's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
Richard W. Gonnello
Faruqi & Faruqi, LLP
685 Third Avenue 26th Floor
New York, NY 10017
Tel: (212) 983-9330
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