Robbins Umeda LLP Announces The Commencement Of A Class Action Lawsuit Against MF Global Holdings Ltd.
Robbins Umeda LLP announces that the firm commenced a class action lawsuit on November 7, 2011, in the U.S. District Court for the Southern District of New York on behalf of all persons or entities who purchased or otherwise acquired the securities of MF Global Holdings Ltd. ("MF Global" or the "Company") (NYSE: MF) between May 19, 2011 and October 28, 2011 (the "Class Period"). The action is against the Company and certain of the Company's officers for violations of the Securities Exchange Act of 1934.
MF Global was one of the world's leading brokers in markets for commodities and listed derivatives. The Company provided access to more than seventy exchanges globally, and was a leader by volume on many of the world's largest derivatives exchanges. MF Global was founded in 1981 and is based in New York, New York.
The complaint alleges that beginning on May 19, 2011, the Company, along with certain officers at MF Global, issued a series of materially false and misleading statements to investors designed to deceive the market and cause shares of MF Global to trade at artificially high prices.
In particular, the complaint alleges that officials at the Company misrepresented and failed to disclose to investors material adverse facts that: (1) MF Global was suffering from serious liquidity pressures based on its exposure to the European debt crisis; (2) MF Global's internal controls were highly deficient and were unable to clearly segregate clients' funds; and (3) that disclosure of MF Global's true risk profile would inevitably lead to a credit downgrade.On October 24, 2011, Moody's Investors Service ("Moody's") slashed MF Global's credit rating to Baa3, or near junk status, citing the Company's significant risk exposure to European debt. Following this downgrade, officials at the Company attempted to calm the market by falsely claiming that MF Global's exposure to European debt was "sound and well-structured," and that Former Jersey Governor, John Corzine, had bolstered the Company's risk-management practices when he became MF Global's Chief Executive Officer in March 2010. Then, on October 27, 2011, Moody's and Fitch Ratings downgraded the Company's credit rating to junk status, and shares of MF Global closed for the day at a record low of just $1.43 per share. Finally, on October 31, 2011, MF Global filed for Chapter 11 protection and the New York Stock Exchange suspended trading of the Company's shares and moved to de-list the Company altogether.
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