NEW YORK, Oct. 14 – LAWFUEL – The Law News Network – An investor sued Refco, Inc. (“Refco” or the “Company”) (NYSE: RFX) today, alleging that the Company issued materially false and misleading financial statements in connection to its August 11, 2005 initial public offering (“IPO”).
Berman DeValerio Pease Tabacco Burt & Pucillo (http://www.bermanesq.com)
filed the class action in the U.S. District Court for the Southern District of
New York. The lawsuit seeks damages for violations of federal securities laws
on behalf of all investors who purchased Refco common stock between August 11,
2005 and October 7, 2005, inclusive.
To receive a copy of the complaint, you may contact the court, call the
firm at (800) 516-9926 or go to http://www.bermanesq.com/pdf/refco-cplt.pdf .
The lawsuit claims that defendants violated Sections 11 and 15 of the
Securities Act of 1933, 15 U.S.C. Sections 77k and 77o.
According to the complaint, on October 10, 2005, Refco disclosed that an
internal company review had uncovered a $430 million receivable owed to the
Company by an entity controlled by Refco’s Chairman and Chief Executive
Officer, Phillip R. Bennett. The receivable was not shown as a related party
transaction in the Company’s prior period financial statements or its
Registration Statement and Prospectus filed in connection with Refco’s August
11, 2005 IPO.
Refco further disclosed that the Company’s financial results for fiscal
years 2002, 2003, 2004 and 2005 and the first quarter of fiscal 2006, which
began on March 1, 2005, “should no longer be relied upon.”
Bennett, who took an indefinite leave of absence at the request of Refco’s
Board of Directors when the news broke on October 10, 2005, was arrested the
next day and charged with securities fraud by the United States Attorney. The
Securities and Exchange Commission is also conducting an inquiry into the
matter.
Following Refco’s October 10, 2005 announcement, the Company’s stock
plummeted $12.96, or 45%, closing that day at $15.60 and wiping out more than
$1 billion in market capitalization. Trading in Refco’s stock was halted for
most of Tuesday, October 11, 2005, and when trading resumed the stock
continued to fall, closing at $13.85. The stock plunged another 22% on
October 12, 2005, the day Bennett’s arrest was announced, losing $3.00 per
share to close at $10.85. On October 13, 2005, trading was again suspended
after the stock dropped an additional 27% to $7.90 in pre-market activity.
The shares, which were priced in the IPO at $22 per share, hit an intra-day
high on September 7, 2005 of $30.55.
If you purchased Refco common stock between August 11, 2005 and October 7,
2005, inclusive, you may wish to contact the following attorneys at Berman
DeValerio Pease Tabacco Burt & Pucillo to discuss your rights and interests.
Bryan A. Wood, Esq.
Joseph C. Merschman, Esq.
One Liberty Square
Boston, MA
(800) 516-9926
law@bermanesq.com
If you wish to apply to be lead plaintiff in this action, a motion on your
behalf must be filed with the court no later than December 12, 2005. You may
contact the attorneys at Berman DeValerio to discuss your rights regarding the
appointment of lead plaintiff and your interest in the class action, or you
may submit information online at
http://www.bermanesq.com/Securities/Signup1.asp?caseid=558. Please note, you
may also retain counsel of your choice and need not take any action at this
time to be a class member.
Berman DeValerio Pease Tabacco Burt & Pucillo prosecutes class actions
nationwide on behalf of institutions and individuals, chiefly victims of
securities fraud, antitrust law violations, and consumer fraud.
