The Securities Arbitration Law Firm of Klayman & Toskes (“K&T”)(www.nasd-law.com) announced today that it is investigating potential claims on behalf of investors who purchased MF Global (OTC: MFGLQ.PK) 6.250% Senior Notes due 2016 which were offered for sale in August of 2011. The offering consisted of $325 million in aggregate principal amount of 6.250% Senior Notes due 2016. Jefferies (NYSE: JEF) served as the sole book-running manager for the offering, with BofA Merrill Lynch (NYSE: BAC), BMO Capital Markets (NYSE: BMO), Lebenthal & Co., Commerzbank, Sandler O’Neill + Partners, Natixis and US Bancorp serving as co-managers of the offering.
The underwriters of a securities offering have an obligation to conduct adequate due diligence of the issuer during the underwriting process. Accordingly, K&T is focusing its investigation on what might have been known or what should have been known to the underwriters of the 6.250% Senior Notes at the time of the offering. Prospective investors rely on underwriters to pass on the soundness of the securities and the correctness of the registration statement and prospectus. Underwriters are familiar with the process of investigating the business condition of a company and possess extensive resources for doing so. Consistent with this important “gatekeeping” role in the offering process, Sections 11 and 12(a)(2) of the Securities Act of 1933 subject underwriters to potential liability for any material misrepresentations or omissions contained in a registration statement or prospectus.
In September of 2011, only one month after the offering of the Notes, regulators reported that MF Global was overvaluing some of its European debt investments, and that as a result it was required to raise more cash. This week MF Global filed for bankruptcy after it reported the largest quarterly loss in company history, mostly caused by big losses on proprietary trading. Also this week, its was reported that, according to a federal official, MF Global admitted to using clients’ money as its financial troubles mounted, and that an MF Global executive told regulators that the company had diverted client money. It isn't clear where the money ended up, what it might have been used for, or when the diversion of client funds occurred. The FBI is now expected to investigate whether the firm’s actions violated criminal laws.
If you purchased MF Global 6.250% Senior Notes due 2016 at the offering, please contact Steven D. Toskes or Jahan K. Manasseh of Klayman & Toskes at 888-997-9956 to explore your legal options. You can also visit us on the web at www.nasd-law.com
Contacts:
Steven D. Toskes or Jahan K. Manasseh,
888-997-9956
