Louis Freeh filed an adversary complaint in the Southern District of New York against Jon Corzine, Bradley Abelow and Henri Steenkamp, asserting that the three defendants violated their fiduciary duties of care, loyalty, and oversight owed to MF Global and its affiliates. The complaint summarizes its claims as follows:
The Trustee brings this action against Defendants for acts and omissions that culminated in the business collapse of the Company and the bankruptcies of the Debtors. As detailed herein, Defendants, in their capacities as officers, breached their fiduciary duties of care,loyalty, and oversight over the Company, and failed to act in good faith.During the period when Defendants were running MF Global, they dramatically changed the Company’s business plan without addressing existing systemic weaknesses that ultimately caused the plan to fail. As part of the new business plan, and in violation of his fiduciary duties to MF Global as the Chief Executive Officer (“CEO”) of Holdings Ltd. and MF Global Inc. (“MFGI”), Defendant Corzine engaged in risky trading strategies that strained the Company’s liquidity and could not be properly monitored by the Company’s inadequate controls and procedures. Defendants Abelow and Steenkamp, Corzine’s hand-picked deputies and the Company’s most senior officers, breached their fiduciary duties by failing to ensure that the Company’s procedures and controls were adequate and could accommodate the Company’s new business plan.