US judges have approved a settlement worth about US$546 million between MF Global and JPMorgan Chase, which could clear the way for former customers of failed MF Global to get more of their money back.
The settlement which was first announced in March 2013, resolved claims levied by James Giddens, the trustee winding down MF’s broker-dealer unit MF Global Inc, and by the broker’s former customers, who are pursuing a federal class action over MF Global’s collapse in 2011.
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JPMorgan will pay to reimburse customers, and will also relinquish claims on other funds.
MF Global, headed by ex-New Jersey Governor Jon Corzine has filed for bankruptcy amid concerns by investors about its exposure to US$6.3 billion in sovereign debt.
Giddens has said that the settlement will allow him to eventually return 100% of customer’s money, which was frozen when MF Global went bankrupt. 90% of the customers have already recovered their funds.
Under the settlement, JPMorgan will pay US$100 million to benefit former customers. It has also agreed to return more than US$29 million in brokerage funds and to release claims on US$417 million it earlier returned to Giddens.
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By GlobalDataJames Kobak, the lead attorney for Giddens, said: "The overall settlement unlocks over $1 billion for customers and other creditors."
The bank will make a separate US$7.5 million payment for attorneys’ fees and expenses to lawyers.
