Corporate bankruptcy is a "litigation nightmare: Everyone ends up suing everyone," said Charles Elson, a professor and director of the Weinberg Center for Corporate Governance at the University of Delaware. "The officers and directors are in for a lot of litigation."
At least two class-action lawsuits on behalf of MF Global shareholders already have been filed against Corzine and three other executives. They accuse the firm and its top officials of making false and misleading statements about MF Global's financial strength, internal controls, and cash balances.
MF Global filed for bankruptcy protection Oct. 31 after a disastrous bet on European government debt. In just a week, stock investors lost about $585 million, the shareholders say.
More than $600 million in clients' money is still missing. Regulators say MF Global moved the money out of client accounts within days as the firm's cash dried up.
Meanwhile, Bloomberg News reported Monday that MF Global Holdings Inc., parent of the bankrupt broker-dealer, has been sued by former employees who said they were terminated without cause and didn't get 60 days' advance notice of the firings, according to a court filing.
More than 1,060 employees were terminated in accordance with a bankruptcy court mandate, James W. Giddens, the trustee for the liquidation, said Friday.
No one at MF Global has been charged with a crime or civil violation. But regulators and the FBI and other criminal investigators are investigating MF Global's failure, and Corzine has hired a prominent white-collar defense attorney.
A public-relations firm hired by Corzine declined to comment Monday. An MF Global spokeswoman had no immediate comment. And Corzine's lawyer didn't immediately return a call.
It is not clear just how much money Corzine is worth. He spent roughly $100 million of his fortune first to win a U.S. Senate seat, then the New Jersey governorship. In 2005, the last full year he was a U.S. senator, he was estimated to be worth $125 million to $175 million.
Corzine's disclosure filings as governor, through 2009, provide less detail on his finances. They do show he held interests in real estate partnerships, investment companies, hedge funds, and private equity funds.
After MF Global's bankruptcy, Corzine declined to take his $12 million severance pay.
Legal experts say Corzine could be held personally liable for misrepresenting to investors the risks the firm had taken.
MF Global didn't list the European debt on its balance sheet for all to see. Instead, those holdings were shifted to the company's "off-balance sheet," deep in its financial statements.
Some separate filings with regulators excluded the European debt entirely.
Under a 2002 anti-corporate fraud law - which Corzine co-wrote as a U.S. senator - CEOs of public companies must personally certify the accuracy of their company's financial statements.
If client money was used by the firm for its own purposes, Corzine could be held responsible, said Thomas Ajamie, an attorney who specializes in financial fraud cases.
"That would be the house gambling with customers' money," Ajamie said.