MF Global Employee Losses Lawsuits: Arbitration for MF Global Employees

With the bankruptcy of MF Global, one of the most well-known brokers on Wall Street, both investors and employees are seeking redress for the losses they incurred from the improper actions taken by the company. Former account holders are currently attempting to find over $1 billion in funds that MF Global claims was misplaced as it attempted to stave off its eventual bankruptcy, which occurred on October 31, 2011.

As for the former employees of the firm, they incurred $113.5 million in losses from the price decline of the 15.9 million shares of stock that they held in the company. The stock, which traded as high as $9.28 at one point in the past year, currently trades for mere pennies. 

Employees forced to accept MF Global Stock.

Employees argue that MF Global revised its Long Term Incentive Plan in February of 2010, which forced more than 1,100 employees to accept part of their salaries in shares of MF Global stock in lieu of cash. As well, executives at MF Global engaged in a systematic campaign to promote stock ownership among employees through its Employee Stock Purchase Plan.

During this campaign, Jon Corzine, the Chairman and CEO of the company, purposefully misled employees by claiming that MF Global was being run conservatively and was in sound financial shape. Other executives at the company continued this charade even as the reality of the situation was being revealed: one week before MF Global declared bankruptcy, CFO Henri Steenkamp told Standard and Poor's that “MF Global [was] in its strongest position ever.”

Despite the adamant protestations of Corzine, MF Global was engaging in a variety of risky activities that would ultimately lead to the downfall of the company. In addition to leveraging the company's assets more than 40 times, MF Global made a $6.3 billion investment in the debt of several European nations, a bet that went terribly wrong when the problems in Greece threatened the European financial system with a cascade of defaults by debt-ridden countries. 

When the extent of MF Global's losses on its European sovereign debt holdings became apparent, Moody's downgraded the company's credit rating to Baa3, which is just one level above junk status. One week later, the company filed for bankruptcy.

Employees file a lawsuit against MF Global, arbitration may be best remedy.

In December, two former employees filed a class-action lawsuit against 12 executives of the firm in order to redress these grievances. However, our law firm believe that an arbitration process may be more effective than a class-action lawsuit in helping former employees get their money back, especially considering the fact that many employees may be ineligible to join the class-action lawsuit due to prior legal constraints.

An arbitration process for individual employees would drastically reduce the amount of time needed to render a judgment from a few years to just a few months. In addition, an arbitration process would likely lead to a more favorable judgment for the employees. 

The negligence and misrepresentations of the executives at MF Global have created a financial mess, causing much pain for former clients and employees. However, with a prudent legal strategy, these people should be able to receive recompense for the wrongs done to them.

Are you an MF Global employee that lost money from MF Global's collapse? We may be able to help get your money back.

If you were an MF Global employee and/or invested in MF Global Bonds or any other MF Global product, please complete the form on this page or call Attorney Bill Kyros or George Pressly at 1-800-934-2921 to discuss your rights.