Dunque in sintesi
- L'auditor era Grant Thornton (per chi avesse la memoria corta, lo stesso di Parmalat)
- Bennet, il Ceo, ha(veva) mezzo billion di assett suoi, infatti ha restituito subito i $ 435million di crediti dubbi che aveva veicolato fuori da Refco, in una società sua
- qualcuno dice che RFX ha bisogno del debito per funzionare (ma perché?, non capisco, GZ ne sai meglio?)
- qualcuno evoca lo spettro di LTCM, ma viene rimbeccato da chi ricorda la distinzione tra broker (come RFX) e fondo (come l'LTCM)
- nel frattempo i clienti sembra si stiano innervosendo (e abbandonando il broker). Se ciò accdesse in maniera massiva RFX varrebbe 0.
- a riprova del fatto che la situazione si sta facendo pericolosa, gli avvoltoi (leggi studi legali USA) stanno cominciando ad avventarsi sulla preda (i.e. avviano class action)
- nel bene o nel male il titolo resta sospeso e, addirittura si sta pensando di ritirarlo dal listino (quando leggo queste notizie vorrei essere corto)
October 15, 2005 12:37:07 (ET)
NEW YORK, Oct 15, 2005 (BUSINESS WIRE) -- Shalov Stone & Bonner LLP recently commenced a securities class action on behalf of purchasers of the securities of Refco, Inc. (RFX, Trade), in the period between August 10, 2005, and October 7, 2005. The complaint names as a defendant, among others, Grant Thornton LLP ("GT").
Grant Thornton was at all relevant times Refco's principal outside accounting firm and auditor. The complaint alleges that GT certified as fair and accurate the false financial statements of Refco that were included in the company's Registration Statement and Prospectus. According to the complaint, the financial statements violated Generally Accepted Accounting Principles and GT's certifications falsely stated that it had performed its audits in conformity with Generally Accepted Auditing Standards.
The complaint further alleges, among other things, that--just two months after its initial public offering--Refco announced that Bennett was being placed on a leave of absence and that the company had discovered (ostensibly through an internal review) a receivable of $430 million owed by Bennett to the company. The company also revealed that, based on the undisclosed related party transaction, its prior financial statements should not be relied upon.
The broker has more than 200,000 customers, including corporations, government agencies, hedge funds, pension funds, financial institutions and retail and professional traders.
Refco was rocked this past week by a scandal that allegedly involves its chief executive and at least $430 in hidden debt he may have owed the company.
Refco said on Monday it had suspended Phillip Bennett as CEO and added that he had repaid the company $430 million.
Bennett was arrested late Tuesday and charged on Wednesday with securities fraud related to Refco's Aug. 22 initial public offering by the U.S. Attorney for the Southern District of New York in Manhattan.
On Thursday, Refco said it was shutting Refco Capital Markets for 15 days. Some analysts speculated that the division, which handles foreign-exchange and fixed-income over-the-counter transactions and offers prime brokerage, trading and stock-lending services, was losing customers.
The crisis accelerated on Friday when Refco announced it was unwinding trades at its Refco Securities LLC broker dealer, a move several observers said was a preliminary step to shutting down its largest unit.
Refco shares lost almost two-thirds of their value in the two days before the New York Stock Exchange halted trading indefinitely on Wednesday. On Thursday, the NYSE warned it's considering delisting the stock. The stock last traded at $7.90, down more than 70% from its IPO less than two months ago.
Refco's bonds slumped as agencies such as Standard & Poor's and Moody's Investors Service chopped their credit and debt ratings on the company, with S&P saying on Friday that a technical default by one of the company's units was "almost certain."
Refco's troubles may have already sent ripples through some markets.
Declines in crude and gasoline prices on Friday "could've been exacerbated by some traders at Refco liquidating their positions in preparation for moving their accounts," said Phil Flynn, a senior analyst at Alaron Trading.
Traders said the dollar was also pressured by institutions shifting accounts away from Refco.
"The Refco scandal is putting some pressure on the dollar," said Michael Woolfolk, senior currency strategist at The Bank of New York. "There has been some clearing out of positions in the futures market."
Amid concern Refco may not be able to meet all its financial obligations, some experts said customers are probably leaving the broker.
"Clients may just walk away from Refco," said Peter Fusaro, chairman of Global Change Associates Inc., a New York-based energy risk advisory firm. "If they can't honor their commitments people get nervous and go elsewhere very quickly."
Refco's regulators have rushed to try to save the broker or at least soften the impact if the company collapses.
The Wall Street Journal reported late Friday that senior regulators at the Chicago Mercantile Exchange and the Commodity Futures Trading Commission asked Goldman Sachs (GS, Trade) and other banks to buy Refco to calm fears among investors, lenders and trading partners who have become increasingly concerned about the future of the company.
Goldman, which was appointed as Refco's advisor this week, isn't interested, the newspaper added, citing a person familiar with the company's thinking.
Beyond Refco's market reach and large roster of clients, what's likely perturbing regulators is that fact that the broker needs to borrow money to process trades for clients, said Dodd of the Financial Policy Forum.
Bank of America (BAC, Trade) arranged a $800 million loan and a $600 million debt offering for Refco last year, along with Credit Suisse (CSR, Trade) and Deutsche Bank (DB, Trade).
The banks met on Friday to discuss whether to send Refco a letter of default, according to Wall Street Journal Online.
Because the scandal has caused Refco to say its financial statements can't be relied upon, the banks could claim the company has broken its loan agreements and debt covenants "by virtue of material misrepresentation," Kevin Starke, senior equity analyst at Weeden & Co., said in a note to clients on Thursday.
If Refco files for bankruptcy, it could take years for the company's lenders to get their money back, Dodd said.
"This may make these banks look like less financially sound counterparties to trade with," Dodd explained. "If fewer people want to trade with them, that could have a knock-on effect throughout markets."
That worst-case scenario happened after Long-Term Capital collapsed, Dodd added.
"Everyone knew LTCM had big exposures with the major derivatives dealers, but no one knew who was safe to trade with, so the markets froze up," he said. "That's also what happened in the energy markets after Enron."
Still, Dodd and other experts said Refco's demise wouldn't spark so-called systemic problems that plagued global markets after the LTCM and Enron debacles.
Refco doesn't act as a principal on major transactions, unlike Enron and LTCM, said Brett Friedman, a partner at Risk Capital Management, a New York firm that advises energy companies and banks on credit and counterparty risks.
"Refco's a broker, so this isn't like the Enron crisis when a major counterparty on lots of trades suddenly disappeared," Friedman explained. "Their demise wouldn't pose a systemic threat."
Refco also wasn't a broker to a lot of major financial institutions, but instead focused on individual traders and smaller, institutional investors, he added. That should limit the impact on broader markets.
Still, the future of Refco remains in doubt.
If a lot of Refco's clients move their accounts to competitors, the company's lenders may decide it's not worth pumping money back into the broker, said Thomas Lord, president of Volatility Managers LLC, which advises companies on risk management in commodity markets.
Selling a brokerage business without clients would also be difficult, he added.
"If the clients have gone, what have they got to sell?" Lord said. "They'd be selling an empty Rolodex."
Refco's former CEO Phillip R. Bennett was arrested and charged formally on October 12, 2005 for hiding up to $545 million in bad debts. According to the Associated Press, "Link