Seven underwriters of the failed MF Global Holdings Ltd. reached a partial settlement with investors, who had filed a lawsuit in 2011 seeking to hold them and some of the brokerage's executives, including its CEO, responsible for its collapse, Reuters reported today. The proposed settlement calls for the seven underwriters to pay the plaintiffs $74 million, according to court papers filed in a New York court yesterday. The underwriters cited in the settlement are Citigroup, Deutsche Bank, Goldman Sachs, JP Morgan, Merrill Lynch, Pierce, Fenner & Smith, RBS Securities and Sandler O'Neill. Once run by former Goldman Sachs co-chairman and New Jersey Governor Jon Corzine, MF Global collapsed amid worries about Corzine's $6.3 billion bet on European sovereign debt and the use of customer money to cover liquidity shortfalls. Former stockholders and bondholders, led by the Virginia Retirement System and the province of Alberta, Canada, had accused MF Global of inflating its ability to manage risk, obscuring the risks of its big bet on European sovereign debt, and improperly accounting for deferred tax assets.
