Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Monday, August 4, 2008

Former Refco CEO Settles Fraud Charges

On July 29, 2008, a final judgment by consent was entered by the United States District Court for the Southern District of New York against Phillip R. Bennett, the former Chairman and Chief Executive Officer of Refco Inc., in a civil injunctive action brought by the SEC alleging that Bennett orchestrated a fraud that periodically concealed hundreds of millions of dollars owed to Refco Inc. and its corporate predecessor, Refco Group Ltd. (together, Refco), by a private entity that Bennett controlled. The complaint also alleged that Bennett directed practices that artificially inflated Refco Inc.'s reported financial results. The final judgment, to which Bennett consented without admitting or denying the Commission's allegations, permanently enjoins Bennett from violating antifraud, record keeping, periodic reporting, internal controls, and certification provisions of the federal securities laws and bars him from serving as an officer or director of a public company.

On July 30, the Commission also issued an Order Instituting Administrative Proceedings against Bennett that bars Bennett from association with any broker, dealer, or investment adviser. Bennett consented to the issuance of the Order, without admitting or denying the Commission's findings except as to entry of the injunction.

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