
Man buys Refco for $282m; Bennett indicted
The sale is well below initial estimates. initially, Refco planned to sell the brokerage, Refco LLC, and various other subsidiaries for a total of $768 million. But since the Chapter 11 announcement of the parent company (though not the brokerage) clients have been leaving the brokerage in large numbers, reducing its value.
Man now plans to liquidate the brokerage under Chapter 7 of US bankruptcy law, bringing its customer accounts into its own brokerage business.
Meanwhile, a grand jury in New York indicted Refco's former chief executive, Phillip Bennett, for conspiring to conceal debts run up by its customers in the late 1990s, and thus defrauding the investors in Refco's August initial public offering (IPO). Bennett himself made $100 million from selling shares in the IPO, according to the indictment. Although the indictment referred to other conspirators, none were named, and no others have so far been indicted.
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