Alberta Investment Management Corporation (AIMCo), together with the Virginia Retirement System, has successfully recovered USD 204.4 million on behalf of investors in the now-defunct broker-dealer MF Global.
AIMCo and Virginia serve as Co-Lead Plaintiffs in the class action securities litigation In re MF Global Holdings Limited Securities Investment Litigation and have pursued the case for over three years. AIMCo is represented by Bleichmar Fonti Tountas & Auld LLP ("BFTA") and Virginia by Bernstein Litowitz Berger & Grossmann LLP.
"AIMCo considers its fiduciary obligations to our Alberta clients to be of paramount importance. Companies that do not adhere to those same high standards should know that we will work tirelessly, and exhaust all available avenues, to ensure our clients best interests are preserved," says Kevin Uebelein (pictured), AIMCo Chief Executive Officer. "The markets in which we operate seek to ensure a fair and a level playing field for all investors, and AIMCo is committed to be a leader in ensuring that integrity is maintained. We are pleased to have secured this settlement on behalf of all applicable investors in MF Global."
MF Global filed for bankruptcy in 2011, shortly after investors learned that MF Global's financial stability was at risk, and that over $1.2 billion in customer funds were missing. AIMCo sought to be appointed Co-Lead Plaintiff in the prosecution of claims to recover investors' losses from the collapse. AIMCo and Virginia conducted a detailed investigation of the claims in the action and overcame multiple motions to dismiss in November 2013, when Judge Marrero of the United States District Court for the Southern District of New York sustained Lead Plaintiffs' claims in their entirety. The claims alleged that MF Global misrepresented to the market its risk controls and liquidity position, failed to disclose its overexposure to European sovereign debt, and failed to properly account for its deferred tax assets.
Lead Plaintiffs reviewed millions of documents from defendants and third parties, and conducted over 50 depositions of former employees of MF Global and other key witnesses, including four days of testimony from MF Global's former CEO Jon Corzine. AIMCo's litigation counsel was led by BFTA partners Javier Bleichmar, Dominic J Auld, and Cynthia Hanawalt, who praised AIMCo's leadership role in the action.
"This excellent result serves as proof that committed institutional lead plaintiffs are critical for furthering the systemic stability of financial markets and obtaining meaningful recoveries in investor litigation," says Auld.
The recovery achieved consists of several partial settlements. AIMCo and Virginia reached a USD64.5 million (USD) settlement resolving the class's claims against former officers and directors of MF Global, including former CEO Jon Corzine, former CFO Henri Steenkamp, former CFO and Global Head of Retail Randy MacDonald, and MF Global's former independent directors. Certain underwriter defendants, led by Goldman Sachs, also settled for USD74.93 million (USD), and AIMCo and Virginia reached a settlement with MF Global's outside auditor PricewaterhouseCoopers LLP of USD65 million (USD).
Further litigation continues against the remaining underwriters, led by Jefferies LLC, who were responsible for the final USD325 million bond offering. Uebelein confirms that: "we will continue to pursue maximum recovery for investors in this case."
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