MF Global Holdings Ltd
Class Period: Nov 5, 2009 to Oct 31, 2011
Lead Plaintiff Deadline: Jan 3, 2012 + Deadline passed
Summary of Case:
A securities class action has been filed against MF Global Holdings Ltd ("MF Global" or the "Company") on behalf of purchasers of MF Global common stockholders from November 05, 2009 through October 31, 2011. This case has been filed in the USDC - New York (Southern).
The complaint alleges that MF Global through its most senior officers and directors made certain materially false and misleading statements regarding the Company's internal financial controls and liquidity levels. The positive statements about MF Global were allegedly knowingly false and misleading when made because: (1) the Company was suffering from serious liquidity pressures based on its exposure to the European debt crisis; (2) the Company's internal controls were highly deficient and were unable to clearly segregate clients' funds; and (3) MF Global's senior management failed to disclose that the Company's true risk profile would inevitably lead to a credit rating downgrade.
In late October, MF Global faced multiple downgrades of its credit ratings by Moody's Investor Service ("Moody's"), Standard & Poor's ("S&P"), and Fitch Ratings ("Fitch"). The first downgrade occurred on October 24, 2011 when Moody's cut the Company's rating to near junk status. On this news, the Company's stock price plunged $1.69 per share - from $3.55 per share on October 24, 2011 to close at $1.86 per share on October 25, 2011 - a decline of more than 47% on unusually high volume. Moody's and Fitch then slashed the Company's credit rating to junk status on October 27, 2011. This downgrade followed the threat of similar action by S&P. The market reacted swiftly to this news as the Company's stock price fell an additional $0.27 per share - from $1.70 per share on October 26, 2011, to close at an all-time low of $1.43 per share on October 27, 2011 - representing a decline of more than 15%. Thereafter, attempts to spin off the Company's futures trading business failed and, on October 31, 2011, MF Global filed for Chapter 11 bankruptcy protection in United States Bankruptcy Court in New York. The New York Stock Exchange suspended trading in the Company's stock and moved to de-list its shares on November 1, 2011. All told, investors lost approximately $585 million in market capitalization in a single week.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.