Judge pushes civil trial over BP spill into 2013

NEW ORLEANS (AP) -- The federal judge who will decide whether to approve a class-action settlement of claims against BP PLC has scheduled a January 2013 trial for other claims spawned by the deadly blowout of the company's deepwater well in the Gulf Mexico.

After meeting Thursday behind closed doors with attorneys, U.S. District Judge Carl Barbier scheduled the start of the trial for Jan. 14, 2013.

The Justice Department wanted the trial to start this summer, but BP asked Barbier to wait until after he decides whether to give his final approval to the settlement agreement. Barbier is scheduled to hold a "fairness hearing" on the proposed settlement on Nov. 8, 2012.

The first phase of a three-phase trial originally was scheduled to start Feb. 27, 2012. Barbier postponed it indefinitely after BP and the Plaintiffs' Steering Committee announced they had reached a deal that would resolve billions of dollars in claims by more than 100,000 claims by people and businesses blaming economic losses on the 2010 spill off the coast of Louisiana.

In a court filing Tuesday, government lawyers argued the settlement agreement shouldn't delay a trial for claims that aren't covered by the deal. The state of Alabama also asked Barbier to set a new trial for this summer.

The proposed settlement doesn't have a cap, but BP estimates it will pay about $7.8 billion to resolve the private claims. It doesn't resolve separate claims brought by the federal government and Gulf states against BP and its partners on the Deepwater Horizon drilling rig over environmental damage from the spill.

The deal also doesn't resolve private plaintiffs' claims against Switzerland-based rig owner Transocean Ltd. and Houston-based cement contractor Halliburton.

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Testimony shows MF Global trustee to seek civil fines

By Nick Brown

NEW YORK (Reuters) - The trustee for failed commodities brokerage MF Global Inc plans to tell a Congressional committee on Tuesday he supports civil fines for executives when their commodities brokerages lose customer money, even without proof they knowingly broke rules.

James Giddens said MF's collapse was due in part to lack of supervision, according to a copy of his planned testimony to the U.S. Senate Committee on Banking, Housing & Urban Affairs, obtained by Reuters.

Giddens is the trustee tasked with recovering as much money as possible for former MF Global customers. The company collapsed in October after revealing exposure to risky European debt and with a huge shortfall in client accounts.

According to a February report from Giddens, the estimated $1.6 billion shortfall resulted from MF Global workers commingling customer funds with the firm's own cash, a violation of a rule segregating client money from corporate assets.

While investigators have not yet brought charges alleging criminal intent, civil fines do not require intent.

"Where there is a shortfall in customer funds, Congress should consider making the officers and directors of the company accountable and personally and civilly liable for their certifications," Giddens' testimony says.

Giddens has said separately he may bring civil lawsuits against executives for breach of fiduciary duty and other alleged violations.

According to his testimony, the trustee will also say he supports a rule change that would require commodities brokers to hold an excess of customer funds in segregation in case of emergency.

Such a rule "could help ensure that there is a sufficient cushion at all times," according to the testimony.

Giddens also supports setting up a protection fund for commodities customers, similar to the Securities Investor Protection Corp, an industry-funded insurance program to protect customers of failed securities firms.

It could be generally affordable as most commodities traders hold small accounts, Giddens' testimony says.

"The liquidation of MF Global Inc. would have played out differently had there been even a modest protection fund for commodities customers," the testimony says.

Giddens and several regulators, including Commodity Futures Trading Commissioner Jill Sommers and CME Group Inc Executive Chairman Terrence Duffy, are testifying on Capitol Hill on Tuesday.

Louis Freeh, the trustee in charge of recovering money for creditors of MF Global's parent company, is also slated to testify.

Giddens plans to push support for an idea to require commodities brokers to segregate the funds of clients who trade on foreign exchanges, and a rule that would require commodities traders to meet certain suitability requirements, according to testimony.

(Editing by Paul Tait)

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