NEW YORK, Oct. 20, 2005 (PRIMEZONE) -- A pending lawsuit alleges that Refco, Inc. ("Refco" or the "Company") (NYSE:RFX) issued materially false and misleading financial statements in connection with its August 11, 2005 initial public offering ("IPO").
Berman DeValerio Pease Tabacco Burt & Pucillo (www.bermanesq.com) filed the class action Oct. 14 in the U.S. District Court for the Southern District of New York. The complaint 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. Section 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.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca