(CN) - Former New Jersey Gov. Jon Corzine cannot dismiss claims against him and his officers regarding the collapse of the brokerage firm MF Global, a federal judge ruled.
MF Global collapsed in October 2011, and then couldn't account for what it had done with more than $750 million of its customers' money.
The Commodity Futures Trading Commission filed suit this past June against MF Global Inc., MF Global Holdings Ltd., Corzine as CEO and the assistant treasurer, Edith O'Brien.
Regulators said Corzine had run the company in an arrogant manner and placed bad bets that horrified his underlings, particularly on European sovereign debt.
Earlier suits from shareholders meanwhile were consolidated as one 14-count action in Manhattan against Corzine and 22 other MF Global directors, officers and underwriters.
U.S. District Judge Victor Marrero likened MF Global's catastrophic collapse, during which $1.6 billion allegedly disappeared, to "a massive train wreck."
He explained Tuesday that the analogy was meant to have the parties pursue "the exceptional route to the most speedy, economical, and just resolution possible."
"Efficiency was not in the cards," however, Marrero lamented.
"And so, before further investigation into plaintiffs' claims as to what set in motion such an extraordinary chain of events, defendants seem convinced that no one named in this lawsuit could possibly have done anything wrong," the 105-page opinion states. "So confident are they in the validity of this perception that, at what must have amounted to an enormous expenditure of money, time and energy, they seek a court ruling dismissing the complaint in its entirety, thus barring any discovery that might shed light on remaining unknowns that bear momentous consequences for the victims who have suffered the losses."
The defendants complained that the complaint gives both too much and too little detail, according to the ruling. They said the class gives more information than necessary to present a precise statement of the facts, and yet not enough to give them fair notice of why they are being sued.
Marrero said Corzine and his officers imply that the fall of MF Global, as characterized by the plaintiffs, never happened, or if it did occur, no one in its company played a role in it. They would skirt blame by pointing to the supernatural or simply saying that "stuff happens," according to the ruling.
These claims sat poorly, however, with the judge.
"In evaluating the application of the law that defendants argue would allow the outcome they seek at this stage of the litigation, the court's assessment may simply be stated: It cannot be," Marrero wrote.
Finding that the investors sufficiently pleaded their claims against Corzine and the other defendants, Marrero denied all six motions to dismiss.
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