Ex-Refco CEO Unusually Cooperative in Shareholder Suit

Securities Law

Ex-Refco CEO Unusually Cooperative in Shareholder Suit

Posted May 30, 2008, 06:10 am CST
By Debra Cassens Weiss

The former chief executive officer of Refco Inc. has held a series of “highly productive meetings” with plaintiffs lawyers suing the bankrupt brokerage firm and its advisers.

The lawyers informed the judge overseeing the June 19 sentencing of ex-CEO Philip Bennett of his unusual cooperation, the New York Law Journal reports. A letter to the judge (PDF posted by the Wall Street Journal Law Blog) says Bennett "has made a substantial effort to assist the investors hurt by the collapse of Refco."

Refco’s law firm, Mayer Brown, is one of the defendants in the lawsuits. It is accused of hiding Refco’s financial problems before the company's initial public offering.

Bennett has pleaded guilty to criminal charges, including fraud.

Plaintiffs lawyer John Coffey of Bernstein Litowitz Berger & Grossman told the New York Law Journal the cooperation is unusual. "I can't think of another time a CEO who led a massive fraud agreed to sit down with the investors he victimized," he said.

He said Bennett expressed bewilderment that Refco’s “highly paid advisers accepted at face value what they were told."

Coffey told the Wall Street Journal Law Blog that Bennett described "the intricate role Mayer Brown played throughout Refco’s corporate life.”

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