MF Global Holdings, Ltd. (fka MFGLQ)

[mrfence]

MF Global agrees to settle platinum, palladium manipulation claims


By Nate Raymond

NEW YORK Thu Oct 30, 2014 12:10pm EDT
Oct 30 (Reuters) - The failed MF Global Holdings Ltd and its broker-dealer unit have agreed to settle class action lawsuits accusing them of manipulating platinum and palladium prices.

The proposed settlements, disclosed in court papers filed late Wednesday in Manhattan federal court, call for plaintiffs to receive nearly $21.1 million in allowed claims against the broker-dealer in its liquidation proceeding.

They also call for plaintiffs to receive $5.25 million in cash from MF Global's insurer, and another $1 million from MF Global itself in exchange for assigning their claims against a former trader to the company.

The plaintiffs include both purchasers or sellers of platinum or palladium futures from June 2006 to April 2010, and purchasers of the metals in the physical market during that time.

They accused MF Global, former MF Global trader Joseph Welsh, and hedge fund Moore Capital Management of having schemed from May 2006 to June 2008 to inflate prices in platinum and palladium futures contracts traded on the New York Mercantile Exchange.

Moore previously agreed to pay $57.4 million to the plaintiffs to settle its part of the case.

The lawsuits came after Moore agreed to pay $25 million in 2010 to resolve claims by the U.S. Commodity Futures Trading Commission that it attempted to manipulate platinum and palladium futures prices.

The CFTC also accused Welsh in a 2012 lawsuit of market manipulation. That lawsuit remains pending.

MF Global filed for Chapter 11 bankruptcy protection in October 2011.

As part of Wednesday's settlement, MF Global's bankruptcy estate has also agreed to pay $1 million to be assigned the plaintiffs' claims against Welsh.

Welsh had previously agreed to the entry of $42 million in judgments against him in the class action, which could be only be enforced against a directors and officers insurance policy to which he assigned the plaintiffs the rights.

All settlements must be approved by U.S. District Judge William Pauley in Manhattan.

Representatives for the plaintiffs and James Giddens, the broker-dealer unit's trustee, either did not immediately respond to requests for comment or had no immediate comment.

The case is In Re: Platinum and Palladium Commodities Litigation, U.S. District Court, Southern District of New York, No. 10-03617. (Reporting by Nate Raymond in New York; Editing by Marguerita Choy)
http://www.reuters.com/article/2014/10/30/mfglobal-settlement-idUSL1N0SP1N820141030