UK's Man Group wins Refco auction
11 November 2005 | 4454 views | 0
British hedge fund manager Man Group has won a bidding war to acquire the regulated futures brokerage unit of Refco, the US futures and securities broker forced into bankruptcy by a fraud scandal last month.
Man will pay $282m in cash for Refco's futures businesses in the US, UK, Asia and Canada and will take on an liabilities and other considerations of a further $41 million.
Under the terms of the sale, Refco will retain its net regulatory capital and other liquid assets for an aggregate value of approximately $1.25 billion.
Refco, which was formerly the largest independent US futures and commodities brokerage, was forced into bankruptcy following an accounting scandal in which its former chief executive Phillip Bennett allegedly hid bad debts totalling around $430 million at an unregulated subsidiary that he controlled.
Yesterday British-born Bennett was indicted on charges of conspiracy to commit securities fraud and making false statements with the Securities and Exchange Commission and could face up to 75 years in prison.