[Adfunk Keyword] Refco Singapore Sees US$200M Withdrawal

[Muhammad]

SINGAPORE --Refco Singapore customers have pulled US$200 million out of the futures broking firm after its U.S. parent company came under investigation for fraud last week, The Straits Times reports.

The amount represented about 25% of the funds under management at the Singapore company, but the newpaper quoted managing director its Singapore unit, Tan Hup Thye, as saying the worst is over.

"We had about US$700 million. Now we still have around US$500 million. But I am quite pleased with the numbers now - Withdrawals are drying up and business is going on fine," the paper quoted Tan as saying.

Monday, Refco Inc. (RFXCQ) filed for Chapter 11 reorganization a week after it was disclosed that its now-ousted chief executive, Phillip Bennett, had kept a $430 million debt off the books, allegedly through a series of end-of-quarter loan transactions.

Newspaper Web site: http://straitstimes.asia1.com.sg



Refco shuts down main business


NEW YORK - Potential buyers began circling Refco Inc. (NYSE:RFX - news) on Friday after the largest U.S. independent commodities brokerage shut down another major business as it battled for survival.

Man Group's (EMG.L) brokerage unit, Man Financial, has expressed interest in buying Refco's futures business, according to a source familiar with the matter, who added private equity firms were also eyeing the embattled company.

Man Group is the world's largest publicly traded hedge fund and its brokerage is a major rival to Refco in global futures trading. No one from Man or Refco was available for comment.

Interest in Refco emerged after a dramatic week in which Refco's bond prices plunged to levels often associated with insolvency and trading in shares of the recently-listed firm was suspended after the stock nosedived 72 percent.

"I don't see how they're going to survive this," said Michael Greenberger, a professor at the University of Maryland School of Law in Baltimore, who previously worked at the Commodity Futures Trading Commission.

In the latest development in the deepening crisis, Refco Securities LLC, a broker-dealer that accounts for more than half of Refco's gross revenues, said on Friday it was unwinding clients' and its own positions. The move signals the unit is essentially going out of business, making it the second Refco unit to stop operating this week.

On Thursday Refco Capital Markets, a prime broker that served the hedge fund community, halted activities and froze all its accounts, saying it did not have enough cash to go on.

LOSS OF CONFIDENCE

"The customers and counterparties have apparently lost confidence in the creditworthiness of the company," said Tom Foley, an analyst at Standard & Poor's, which cut the company's debt ratings deeper into junk status on Friday.

As turmoil at the New York-based firm grew, concerned employees started to look for new jobs.

"They are clogging the exits," said a trader at the Chicago Mercantile Exchange, adding that his company had received numerous inquiries for jobs from Refco employees.

Refco's difficulties are a black eye for the futures industry, which has gained new respectability in recent years as its products have grown more widely traded, experts said.

The broker's troubles erupted on Monday when its CEO and chairman, Phillip Bennett, was put on leave after the discovery that a company he controlled owed Refco $430 million.

The broker said its financial statements could not be trusted and it was further probing its books.

Bennett repaid the money on Monday with interest but the discovery sparked a series of investigations, leading to his arrest on Tuesday night and charges on Wednesday.

British-born Bennett, 57, who has led the company for seven years, is accused of hiding at least $430 million in bad debts to inflate the company's financial standing as it went public. Refco raised $583 million in an initial public offering in August with Bennett owning 34 percent of the company.

Refco's auditors Grant Thornton LLP said what was happening at the company "appears to be a purposeful deception that required participation by senior management."

FALLOUT SEEN LIMITED

Another senior Refco executive, Santo Maggio, knew of the hidden debts and has been suspended by the company. No legal action has been taken against him.

Sources said Refco's troubles could help boost competitors like investment banks as customers go to more stable brokers.

But Refco's difficulties are unlikely to spill over to the broader financial system, St. Louis
Federal Reserve President William Poole said on Friday.

"From what I know of that situation, markets are handling it very well," Poole said, indicating that he did not see this as a situation that warranted official intervention.

The Fed has on rare occasions orchestrated bail outs of ailing financial institutions to ensure wider market stability.

The company is being investigated by several regulators including the U.S. securities watchdog, the
Securities and Exchange Commission. In addition, the Public Company Accounting Oversight Board has opened an inquiry into Grant Thornton's audits of Refco, according to a person familiar with the matter.

The SEC said it has restricted the ability of two Refco units, including Refco Securities, to make withdrawals of equity capital or unsecured loans or advances.

Bonds issued by Refco dropped by 9.5 cents on the dollar to 30.5 cents on Friday, indicating investors believe a bankruptcy filing is highly possible.

Share trading in Refco, which only went public two months ago at $22 a share, was suspended on Thursday with the
New York Stock Exchange saying it needed more information to determine if the company should still be listed.

Before trading halted, it shares had dived to $10.85 on the New York Stock Exchange from $28.56 last Friday. They fell to $7.90 in pre-market trade before Thursday's suspension.



* refco * refco fx * refco com * refco private * refco private client * refco trading * refco group * refco forex * www refco * refco securities * refco inc * refco llc * refco private client group * refco ipo * refco and * refco sify * refco trading services * www refco com * and refco * refco charts * refco capital * refco group ltd * forex refco * research refco * futures * real time quotes * s&p 500 * e mini * trading * realtime quotes * stock quotes * put call ratio * nasdaq * nasdaq futures * intraday * cbot * cboe * globex * advance decline * real time * partners * historical * emini * s&p * stock quote * nasdaq 100 * djia * open interest * commodity charts * trin * cme * realtick * interactive brokers * esignal * eurodollar * end of day * futuresource * barchart * eurex * forex * daytrading * nyse * s & p * realtime * commodity * private equity * commodities * dow jones industrial average * qqq * dow jones * quote * s & p 500 * liffe * stock * after hours * day trader * charting * day trade * llc * freequote * stocks * options * tick * stock market * advisors * marketbrowser * vix * dow * asset management * pe ratio * tickers * hedge fund * investments * returns * traders * capital * ibbotson * cbs marketwatch * matif * trades * inc * apax * future * historic * charts * sp500 * securities * comstock * chart * bloomberg * vestar * corp * proprietary * broker * investors * streamer * ticker * cnbc * quotes * yahoo finance * trading company * capital markets * market maker * trader * equity * data * hedge funds * scottrade * crb * option * aex * direct access * closing * mutual fund * investment banking * sgx * ventures * xetra * corporation * yearly * money management * time series * reuters * averages * delayed * investment bank * dax * investment * goldman sachs * industries * investor * technical analysis * tradestation * monthly * ftse * incorporated * prices * etf * cac * financial * market * bund future * margin * corporate finance * holdings * earnings * cvc * mfg * euronext * feed * spx * indexes * manufacturing * indicator * ino * derivatives * overnight * streamers * long term * financial services * cot * invest * brokerage * stops * spread * contract * enterprises * streaming * contracts * derivative * associates ©

--
Posted by Muhammad to Adfunk Keyword at 10/22/2005 03:53:00 PM