GREY:BPWRF - Post by User
Post by
ganzeron Oct 12, 2005 6:14pm
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Post# 9692716
Caught trying to cover short position?
Caught trying to cover short position?Refco Ex-Chief Bennett Arrested for Securities Fraud (Update3)
Oct. 12 (Bloomberg) -- Phillip Bennett, the former chairman and chief executive of
futures broker Refco Inc. was arrested by U.S. authorities and charged with securities
fraud.
Bennett stepped down from both positions on Monday, after Refco revealed he owed
the firm $430 million in unpaid receivables.
Bennett and others, who aren't identified, ``hid from investors in the August 2005
initial public offering of stock in Refco the existence of hundreds of millions of dollars
of related party transactions between Refco and a company controlled by Bennett,''
according to a criminal complaint filed in Manhattan federal court today.
Refco said yesterday that it's cooperating with investigations by the U.S. Securities
and Exchange Commission and the Commodity Futures Trading Commission.
A telephone call to Bennett's lawyer, Gary Naftalis, wasn't immediately returned.
The 6-page complaint says that Bennett failed to disclose in public filings with the
SEC the existence of hundreds of millions of dollars in transactions between Refco
and a company he controlled.
"When those related party transactions were disclosed to the market on Oct. 10,
2005, the stock price plummeted, leading to a loss to investors of over a billion
dollars," the complaint says.
Refco shares fell $3.05 to $10.80 at 12:51 p.m., in New York Stock Exchange
composite trading. The stock hit a 52-week low of $9.82 this morning.