* Grassroots coalition is not a direct creditor of MF
* Group: Corzine should face criminal charges for role in
By Nick Brown
NEW YORK, Jan 8 A bankruptcy judge on Tuesday
rejected a bid by former MF Global customers to
depose the collapsed brokerage's former chief, Jon Corzine.
In a written ruling in U.S. Bankruptcy Court in Manhattan,
Judge Martin Glenn said the Commodity Customer Coalition, which
had sought permission to question Corzine and other former MF
Global insiders, lacked standing because it is not a direct
creditor in the case.
The coalition, a grassroots group led by Chicago-based
commodities trader James Koutoulas, bills itself as representing
the interests of thousands of traders whose accounts at MF
Global were frozen when the company went under.
But the coalition itself is merely a "'watchdog' entity with
its own independent goals," hoping to depose Corzine "in
furtherance of its own interests" rather than those of the MF
Global estate, Glenn said in his decision.
Koutoulas, reached by phone on Tuesday, dismissed that
reasoning as "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 coalition is considering appealing the decision.
MF Global went bankrupt in October 2011 after its heavy
exposure to European sovereign debt spooked investors. The case
has become a political firestorm as investigators in Congress
and elsewhere try to identify the source of an estimated $1.6
billion hole in customer trading accounts.
Most commodities customers have recovered about 80 percent
of the value of their accounts through payouts by James Giddens,
the trustee in charge of finding as much of the money as
possible and liquidating MF's broker-dealer unit.
Giddens last month announced a key settlement with MF Global
affiliates that is expected to raise those payouts even higher.
The coalition has said Corzine should face criminal charges
for his role in the company's fall, though the exact nature of
that role has been unclear. Many officials, including the
Department of Justice and the FBI, have been investigating the
case and have spoken to MF Global executives.
Giddens said in a June report that Corzine failed to address
growing liquidity needs as he built the firm into a global
investment powerhouse, using customer funds to cover liquidity
gaps as the firm teetered on the brink.
But Corzine, the former Goldman Sachs chief and
former Democratic New Jersey governor and senator, has denied
The coalition in November sought permission to depose
Corzine, Chief Financial Officer Henri Steenkamp, former Chief
Operating Officer Bradley Abelow, General Counsel Laurie Ferber,
former Treasurer Edith O'Brien, and Christine Serwinski, former
finance chief at MF's North American brokerage.
The liquidation of MF Global's North American brokerage is
In re MF Global Inc, U.S. Bankruptcy Court, Southern District of
New York, No. 11-2790. MF Global's bankruptcy case is In re MF
Global Holdings Ltd, in the same court, No. 11-15059.