Refco just another deal among friends
COLCHESTER, Conn., (PRWEB) November 11, 2005
Scott+Scott, LLC (http://www.scott-scott.com ), which represents major institutional and individual investors in a securities class action filed on October 11, 2005 in the United States District Court for the Southern District of New York regarding the alleged Refco, Inc. ("Refco") fraud (OTC: RFXCQ.PK - News) and other defendants (Case No. 1:05-cv-08663-DC), will file a more comprehensive and updated complaint Today. Refco securities purchasers between August 11, 2005, and October 18, 2005, inclusive (the "Class Period") are putative class members, but the firm encourages anyone who purchased these securities to contact the firm to discuss their rights.
If you wish to discuss this action or have questions concerning your rights, you may contact the firm for more information. Scott + Scott will provide class members with case materials, answer all questions regarding participation and assist with other services the firm provides. There is no cost or fee to class members. Contact Scott + Scott partner Neil Rothstein (800/332-2259, ext. 22 or cell 619/251-0887). Institutional Investors may also contact the firm. During morning hours, you can also contact the firm at 800/404-7770 or 619/860-537-3818.
Scott Scott’s original complaint alleges that during the Class Period, Refco and certain of its officers and directors, including Bennett, as well as Refco's IPO underwriters and independent auditor, violated provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, by issuing a false and misleading Prospectus to investors as well as making false and misleading statements during the Class Period. It is alleged that because of these securities law violations, investors were deceived out of over a billion dollars while Bennett personally made off with over $111 million. Scott+Scott sought to secure Bennett's improperly obtained assets for the benefit of investors who, because of the Refco bankruptcy, might be unable to look to the insolvent Company for relief.
THE RESTRAINING ORDER
On October 31, 2005, based on a motion filed by Scott+Scott on behalf of the investor Class, as well as discussions with special counsel for plaintiff and Bennett, the Court entered a Temporary Restraining Order ("TRO") to freeze assets that suspended CEO Phillip R. Bennett ("Bennett") obtained from his Refco stock sales in the Company's August 2005 Initial Public Offering ("IPO"). The TRO is in effect pending an Order to Show Cause hearing scheduled for December 1, 2005, at which time the Court will determine whether or not a more permanent restraining order should be issued maintaining the asset-freeze injunction throughout the pendency of the litigation. Refco filed for bankruptcy protection on October 17, 2005.
UPDATED ACTION BY SCOTT + SCOTT, LLC
The complaint to be filed Friday includes the defendants: Bennett, Sherer, Breitman, Harkins, Jaekel, Lee, O’Kelley, Schoen, and Gantcher (all individual defendants), plus Credit Suisse First Boston, Goldman, Sach’s & Co., Grant Thornton, LLP, Banc of America Securities, LLC, Merrill Lynch, Pierce Fenner & smith Inc. Deutsche Bank Securities Inc,. J.P. Morgan Securities, Inc., Sandler O’Neill & Partners, L.P. HSBC Securities (USA) Inc., William Blair & Company, LLC, Harris Nesbitt Corp., CMG Institutional Trading LLC, Samuel A. Ramirez & Company, Inc. Muriel Siebert & CO. Inc., The Williams Capital Group, LP, Utendahl Capital Partners, L.P., Liberty Corner Capital, and Refco Group Holdings. Refco itself is not a named party.
On October 12, 2005, defendant Bennett was arrested and charged by federal prosecutors with securities fraud. It was recently reported on October 19, 2005 in an article entitled “Refco just another deal among friends”. Thereafter, Scott + Scott sought the Temporary Retraining Order of the $111 million and succeeded. Count now sought for the securities violations include untrue material facts stated in the 2005 initial public offering, that the individual defendants and underwriter defendants owed the plaintiffs the duty to make reasonable investigations of the statements made in the Prospectus/Registration Statement and that they did not, that the individual defendants by reason of their authority disseminated false statements knowingly or recklessly and the statements were material, that all defendants had the duty for preparing accurate press release-which were in fact false (all issues raised above are allegations in the Complaint .)
Refco Inc. said yesterday it had received approval from the U.S. Bankruptcy Court for its sale of substantially all of the assets of Refco's regulated commodities futures business to Man Financial Inc., a wholly owned subsidiary of Man Group plc ("Man"), for $282 million in cash and approximately $41 million of assumed liabilities and other considerations. Additionally, Bennett, the former chief executive of Refco Inc., was charged with engaging in a conspiracy that caused Refco to sell $583 million in stock to the public based on "false and fraudulent" statements of its finances. This was stated pursuant to an indictment.
The plaintiff is represented by Scott+Scott, LLC, which has significant experience in prosecuting investor class actions. It has been lead counsel and is currently lead counsel in such cases as the General Motors Employee Benefits Case, Northwestern Energy, Halliburton, Sprint, Royal Dutch/Shell Petroleum ERISA Litigation, the Mattel Litigation, Emulex, ImClone and many more. 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. Cases currently being litigated and/or investigated by Scott+Scott, LLC include: the Guidant Litigation; Boston Scientific Corp.; HCA; Novellus, Stone Energy; Packeteer Inc.; Mills Corp, and International Rectifier Corp., among others.