Friday, October 28, 2005

Refco Executive Cooperating in Government Investigation

The Wall Street Journal reports (here) that Santo Maggio, the former head of Refco's securities unit, is cooperating in the government's investigation of Phillip Bennett, former CEO of Refco who was charged with one count of securities fraud.  It was the revelation of accounting fraud related to receivables on the company's books for which Bennett was responsible that led to the quick demise of the firm, which had been the largest futures trading firm.  The government charged Bennett in a single count criminal information in order to prevent him from leaving the country, and he has been confined to his Park Avenue apartment since the arraignment.  Under Federal Rule of Criminal Procedure 5.1(c), the government must present its evidence at a preliminary hearing within 20 days of Bennett's initial appearance unless he consents to an extension or the government obtains a grand jury indictment.  Maggio's cooperation will be important because the government generally seeks to avoid a preliminary hearing, and a broader indictment is likely. (ph)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2005/10/refco_executive.html

Fraud, Investigations, Securities | Permalink

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