MF Global and its former auditor, PricewaterhouseCoopers, on Thursday notified a judge that they settled their malpractice lawsuit last night, putting to rest one of the last big legal battles related to the demise of the failed brokerage more than five years ago.
Litigation trustee Nader Tavakoli and MF Global's bankruptcy administrator had sought $3 billion in damages from PwC over what it alleged to be improper advice to keep $6.3 billion worth of European sovereign debt off its balance sheet. The dispute went to trial, where Jon Corzine, the former chief executive of MF Global as well as former New Jersey governor, testified as a witness.
The amount of Thursday's announced settlement was not disclosed, but both parties said that the suit was settled to their mutual satisfaction.
During the trial, which was in its third week, attorneys for MF Global's administrator attempted to explain to a jury that PwC's negligence caused massive damages to the firm. When MF Global more fully disclosed the $6.3 billion in European sovereign debt during the third quarter of 2011, it sparked a crisis of confidence in the markets, which led to the eventual collapse of the firm in October 2011, the administrator alleged.
Attorneys for MF Global's administrator had almost finished presenting evidence against PwC before the settlement was reached, according to a person with direct knowledge of the matter.