Peace Breaks Out in Philly

Almost 2½ years after the Commodity Futures Trading Commission pulled the plug on Paul Eustace’s Philadelphia Alternative Asset Management Co, MF Global (MF) has agreed to cough up $75 million to settle claims that it helped perpetrate fraud. According to a press release issued late Monday, “a definitive settlement agreement has been executed by the parties and court approval will be sought within the next 10 days.”

Under the agreement, $69 million—the settlement amount that MF Global reported in its most recent quarterly results—will go to PAAM investors, while the other $6 million will cover legal fees and other expenses. According to the late October statement:

MF Global will obtain full releases and dismissal of the proceedings against it while admitting to no wrongdoing in this matter. Settlement of the case avoids the vagaries of a jury determination and the substantial cost of litigation.

Copies of the agreement have yet to show up in either court records, or among MF Global’s SEC filings. But when they do...

Receiver Ad Litem and MF Global Ltd Settle
Philadelphia Alternative Asset Fund Litigation
Press release Dec. 3 2007