The trustee overseeing MF Global Holdings Ltd.'s bankruptcy sued former Chief Executive Jon S. Corzine and two other top executives over their alleged role in the brokerage's collapse.
In the lawsuit, trustee Louis J. Freeh accused Mr. Corzine, the former governor of New Jersey, former Chief Operating Officer Bradley I. Abelow and former Chief Financial Officer Henri J. Steenkamp of breaching their fiduciary duties to the company and being ultimately responsible for its collapse.
Gary Naftalis, a lawyer for Mr. Abelow, said in an emailed statement that his client "served MF Global with the utmost integrity and diligence during his brief tenure at the company" and that his actions didn't contribute to the firm's collapse. "We are disappointed that the Trustee is now making allegations that lack any factual or legal basis."
Attorneys representing Messrs. Corzine and Steenkamp couldn't immediately be reached for comment Tuesday morning.
The lawsuit, filed late Monday with the U.S. Bankruptcy Court in Manhattan, came as a surprise. Earlier this month, Mr. Freeh had opted to join mediation talks with Mr. Corzine and other former MF Global executives and had postponed filing a lawsuit.
"Although the mediation process is ongoing and after further discussions with the mediator, the Trustee has determined that it is in the best interests of the Chapter 11 estates to file the complaint prior to the plan of liquidation going effective and transfer these significant claims to a litigation trust for the benefit of creditors," Mr. Freeh said in a statement Tuesday.
In the lawsuit, Mr. Freeh highlighted the alleged "acts and omissions" of the executives that he says "culminated in the business collapse of the company and the bankruptcies of the debtors."
When the men were running MF Global, Mr. Freeh said they "dramatically changed" the company's business plan without addressing "systemic weaknesses."
Mr. Corzine, the suit alleges, engaged in "risky trading strategies" that strained MF Global's liquidity. Mr. Freeh says the firm's "inadequate" controls and procedures failed to properly monitor those strategies.
The lawsuit seeks to hold Mr. Abelow and Mr. Steenkamp, whom the suit calls Mr. Corzine's "hand-picked deputies," responsible for those controls and procedures.
"Between defendant Corzine's arrival at the company and the commencement of the bankruptcies of the debtors, MF Global lost well in excess of a billion dollars in value, not including any shortfalls in customer funds," the lawsuit alleges.
The lawsuit seeks damages from the men in an amount to be determined at trial. Any recoveries would go to the holding company's creditors, not customers of its brokerage. MF Global has about $200 million in insurance coverage available to pay legal judgments.
The complaint appears to be drawn from a report into the origins of MF Global's bankruptcy that Mr. Freeh released earlier this month. The document attributed much of the blame for the brokerage's failure to Mr. Corzine.
When the report was released, Steven Goldberg, a spokesman for Mr. Corzine, told The Wall Street Journal that "there simply is no basis for the suggestion that Mr. Corzine breached his fiduciary duties or was negligent."
MF Global, led by Mr. Corzine, collapsed in October 2011. Its bankruptcy initially exposed a $1.6 billion shortfall in U.S. customer accounts, although Mr. Freeh believes all that money is likely to be restored.
Bart Chilton, commissioner of the U.S. Commodity Futures Trading Commission, on Tuesday called for increased accountability from MF Global's former leaders.
"Being a steward of customer money is a super serious responsibility," he said in a statement. "Anyone who violates the law, and particularly anyone at MF Global who used a billion bucks of customer cash that should have been protected, should be punished appropriately."
MF Global this month won confirmation of its liquidation plan, which describes how the brokerage's holding company will pay its creditors.
Mr. Freeh, a former director of the Federal Bureau of Investigation, is in charge of recovering money for creditors of parent company MF Global Holdings Ltd.
Another trustee, James Giddens, is seeking to recover money for customers and creditors of MF Global's broker-dealer business under the authority of the Securities Investor Protection Act, which governs the liquidation of failed brokerage firms.
The two MF Global trustees have found themselves at odds in seeking to divide a limited amount of funds because of their divergent constituencies.
Mr. Giddens has joined with MF Global customers who are already suing Mr. Corzine and other former executives. Mr. Freeh isn't part of that suit.
"We decided the best way to get assets to customers was to join the private class-action lawsuit because the recoveries would go back to customers and not elsewhere," said Kent Jarrell, a spokesman for Mr. Giddens.