Jon S. Corzine, the former CEO of MF Global Holdings Ltd., and former directors and officers agreed to pay $64.5 million to settle an investor lawsuit in the latest unwinding of litigation against the failed brokerage.
The deal with Mr. Corzine, disclosed in a court filing Tuesday in New York, ends suits by investors including the $68 billion Virginia Retirement System, Richmond, and the Canadian province of Alberta, which alleged Mr. Corzine and other executives made false statements in company filings about MF Global's controls and liquidity. They claimed when the facts were disclosed, the prices of MF Global's securities declined precipitously.
The settlement follows an earlier accord reached with PricewaterhouseCoopers, which agreed in April to pay $65 million to rid itself of claims tied to botched audits. Underwriters including Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Goldman Sachs & Co. separately agreed in May to pay investors $74 million. That settlement was approved by a judge on June 26.
The plaintiffs also reached a separate settlement last month with Commerz Markets LLC, a unit of Frankfurt-based Commerzbank AG, which agreed to pay $933,000.
Mr. Corzine and the other defendants denied any wrongdoing in agreeing to settle the suit.
The settlement needs approval by U.S. District Judge Victor Marrero in New York. In November 2013, Mr. Marrero rejected a bid by Mr. Corzine and other former MF officers to dismiss the case, saying the plaintiffs showed “compelling facts” to proceed.
“At the culmination of what occurred at MF Global in the course of a few days, $1.6 billion had disappeared from the company,” Mr. Marrero wrote, likening the situation to a train wreck.
The investors agreed to settle the case after determining that “further protracted litigation might lead to no recovery, or to a smaller recovery,” according to a court filing.
MF Global filed for bankruptcy on Oct. 31, 2011, after a $6.3 billion bet on bonds of some of Europe's most indebted nations. Investors alleged in lawsuits that more than $1.6 billion that should have been segregated was transferred to other parts of the company during a liquidity crisis.
If the accord is approved, the plaintiffs will have recovered $204.4 million in settlement money, Salvatore Graziano and Javier Bleichmar, co-lead counsel for the plaintiffs, said Tuesday in a letter to the judge.
Mr. Marrero scheduled a Nov. 20 hearing on approval of the PwC accord, and the plaintiffs on Tuesday asked him to also hear arguments on the latest settlement.