Refco, Bennett Defrauded Austrian Affiliate, Suit Claims

Law360, New York (July 17, 2006, 12:00 AM EDT) -- Erstwhile Refco president and chief executive Phillip R. Bennett deceived an Austrian Refco affiliate into giving up $5.2 million, which Bennett applied toward the balance of a secret $430 million debt, a new lawsuit alleges.

When disclosed, that debt caused a run on Refco’s accounts that drove the commodities brokerage into Chapter 11, where it has remained since Oct. 17, 2005.

The suit was filed in New York on behalf of Dag Seim, the liquidator of Refco Finanzierungsberatung GmbH (Refco Vienna).

The lawsuit names Bennett and...
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