Refco Securities Continue to Fall as CEO Faces Criminal Charges: Scott + Scott, LLC Updates Shareholder Lawsuit
COLCHESTER, Conn., October 13, 2005 – Scott + Scott, LLC (http://www.scott-scott.com), which filed a shareholder lawsuit against Refco, Inc., reports that it was given new information late Wednesday night regarding the allegations of the case. The case, which Scott + Scott filed at the request of a client, represents investors in a securities class action in the United States District Court for the Southern District of New York against Refco, Inc. (“Refco”) (NYSE: RFX) and certain of its officers, directors and the underwriters Credit Suisse First Boston, LLC and Goldman, Sachs & Company (Case No. 05-Civ-8663 (DC) (RHM)). Refco securities purchasers between August 11, 2005 and October 10, 2005, inclusive (the “Class Period”) are putative class members, but any shareholder may contact the firm. Attorney Neil Rothstein can be reached by cell anytime at 619/251-0887.
Scott + Scott, the firm retained to file FrontPoint Financial Services Fund, LP v. Refco, Inc., et. al., on October 11, 2005, continues to be at the forefront of such litigation. The New York law firm of Wechsler Harwood, LLP, was designated by Scott + Scott and its client to file the Scott complaint after careful review. Cases litigated by Scott + Scott in New York Federal Court include the ImClone case.
If you wish to discuss this action or have questions concerning your rights as a class member, please contact Scott + Scott’s Connecticut office at (800/404-7770) before noon on the East Coast. Thereafter, you can contact Scott + Scott partner Neil Rothstein at (800/332-2259, cell 619/251-0887). Scott + Scott will provide class members with case materials, answer all questions regarding participation and rights and assist with other services the firm provides. There is no cost or fee to class members. Refco provides execution and clearing services for exchange-traded derivatives, and brokerage services in the fixed income and foreign exchange markets in the United States, Bermuda and the United Kingdom. Refco went public via an initial public offering in August 2005. It is a commodities trading firm and in fact, the largest in the world.
Refco’s former CEO, Phillip R. Bennett, was arrested and charged formally on October 12, 2005 of hiding up to $545 million in bad debts. A day earlier, Refco announced that $430 million in debts to the company, funneled through a firm controlled by the ousted chairman and chief executive, was hidden through a number of secret transfers to disguise that much of the debt may have been uncollectible. Bennett, called a flight risk in Court on Wednesday, is a British citizen with a half billion dollars in assets. According to news sources, Bennett reportedly told a colleague in a taped conversation Monday that he was going to Europe within two days. U.S. Magistrate Judge Douglas F. Eaton granted bail, saying he could go free Wednesday after pledging a Manhattan apartment and his New Jersey home as collateral and agreeing to electronic monitoring, a $50 million bond with $5 million in cash.
Scott + Scott was further informed late Wednesday night that Refco’s trading had been analyzed and that the analysis had identified distinct aberrant behavior concerning trading on or around September 20, 2005. Scott + Scott is proactively continuing its investigation (this information is provided only for purposes of relaying all information to the public. Scott + Scott does not provide it for the truth or falsity of allegations as set forth in its complaint.)
Scott + Scott’s complaint alleges that during the Class Period, Refco and certain of its officers and directors violated provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, causing investors to purchase stock pursuant to registration statements containing materially false and misleading statements. Yesterday, Refco’s stock continued its precipitous decline, closing at $10.85, more than 60% lower than last Friday’s price of $28.56.
The plaintiff is represented by Scott+Scott, LLC, which has significant experience in prosecuting investor class actions. The firm dedicates itself to client communication and satisfaction and currently is litigating major securities, antitrust and employee retirement plan actions throughout the United States. The firm represents pension funds, charities, foundations, individuals and other entities worldwide. Current cases the firm is litigating and/or investigating include: Mercury Interactive; DHB Industries; Boston Scientific; Halliburton; Diebold; Human Genome Sciences; and Lexmark International Inc., ADVO, and Gannett among others.
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