Phillip R. Bennett, the chief executive and chairman of Refco Inc., who took the futures broker public two months ago, was placed on a leave of absence after an internal review found he owed the company $430 million.
Bennett, 57, whose backers include Boston-based buyout firm Thomas H. Lee Partners LP, didn’t disclose that the amount was payable by a company he controls that is separate from Refco, according to a Refco statement. Refco shares plunged 33 percent, erasing gains since the initial public offering.
Refco took advantage of a 31 percent surge in trading in futures worldwide last year to sell shares, joining markets such New York Mercantile Exchange in tapping investors. Credit Suisse First Boston, Goldman Sachs Group Inc. and Bank of America Corp.’s securities unit led Refco’s $583 million IPO.
Events at Refco “naturally give rise to regulatory inquiries and shareholder litigation,” said Jacob S. Frenkel, a former Securities and Exchange Commission enforcement attorney who is now in private practice with Shulman Rogers in Rockville, Maryland. “Experience tells us that the long arm of litigation will reach to the company, the individuals and the accountants. You would expect to see the SEC and the Department of Justice knocking on doors.”