ubelieveble crock of nonsense alert. your tax dollars at work. puke. if refco's a canary in the coal mine, then the bad gas is from the laywers -- that much I'll agree with. but refco's screwup says nothing about the system except that people like Lee are either gullible, culpable, or both.
and what, Lee is "unsophisticated?" Hello!? Didn't you do your due dilligence? And, more importantly, didn't you stand to benefit as much from the IPO as Mr. Bennett himself.
NYTimes article: "J. C. Flowers has emerged as a likely buyer of Refco's futures business." http://www.nytimes.com/2005/10/17/b...&en=42369202285e01f9&ei=5094&partner=homepage
It is more like a maneuvering orchestrated by the feds to salvage their reputation and above all the futures industry, and their regulatory obligations! This move is rock solid and well thought and stays in the hands of an US entity! Hope this happens. Well done Refco LLC and regarding this? a more like a diplomatic way of saying I have no chances in winning this bid? http://yahoo.reuters.com/financeQuo...=mtfh74153_2005-10-17_06-29-35_wla2575_newsml .... JC Flowers, private equity firm, buys NIB Capital NV for $2.6bn (â¬2.1bn). Others in the purchasing group are ABN Amro Holding NV, American International Group, Banco Santander Central Hispano SA of Spain, Delta Lloyd, Shinsei Bank of Japan, Bank of America, Government of Singapore Investment, Goldman Sachs Group and JP Morgan Chase. Do we know who will be in this new group? Nice....
so any specualtion how much rfx shrs is worth? according to bloomberg story $1billion offer was rejected by GS..
Refco's Futures Brokerage May Be Sold to Flowers (Update1) Oct. 17 (Bloomberg) -- Refco Inc., the futures broker that's facing insolvency because of a bad-debt scandal, is close to an agreement to sell part of the company to a group led by J.C. Flowers & Co., two people briefed on the discussions said. Flowers, the buyout firm led by Christopher Flowers, emerged as the front-running bidder for Refco's futures brokerage after a weekend of talks led by Goldman Sachs Group Inc., said the people, who asked not to be identified because the discussions are confidential. Carlos Abadi, who runs New York investment bank Abadi & Co., said Goldman rejected a $1 billion bid for Refco from a group that included his firm. A deal for Refco, the largest independent U.S. futures broker, may ease concerns about the impact its collapse would have on financial markets. The New York-based company began shutting two of its three units after stunning clients and investors Oct. 10 with revelations that former Chief Executive Phillip R. Bennett covered up $430 million in bad debts. ``These situations demand immediate action,'' Richard Breeden, who was Securities and Exchange Commission chairman when New York-based Drexel Burnham Lambert Inc. failed in 1990, said in an interview. ``Customers can't wait and accept promises that things will be sorted out in days or weeks or months.'' Regulators including the Commodity Futures Trading Commission stepped in Friday to help prevent a disorderly breakdown of Refco's business. Goldman, the world's No. 3 securities firm by market value, began seeking bids as Refco's chances of survival dwindled. Man Group Plc, the world's largest hedge fund company; Fimat Group, a unit of French bank Societe Generale; and Citigroup Inc. and JPMorgan Chase & Co., the No. 1 and No. 3 U.S. banks by assets, also were involved in the sale talks, people briefed on the negotiations said. Man Group issued a statement today denying it was in talks with Refco. High Stakes ``Someone's going to come in given there are a lot of entities with significant financial stakes involved,'' said Michael Missal, a partner at Kirkpatrick & Lockhart Nicholson Graham LP in Washington who helped untangle WorldCom Inc.'s $1 billion accounting fraud. ``If this goes to bankruptcy, a lot of people will lose a lot of money.'' JPMorgan spokesman Adam Castellani, Citigroup spokeswoman Danielle Romero-Apsilos, both based in New York, and Fimat spokeswoman Siobhan O'Hare all declined to comment. Refco's unregulated unit, Bermuda-based Refco Capital Markets, still may file for protection from creditors as early as tomorrow, one person familiar with the rescue effort said. Abadi, 45, said he expects all of Refco to enter Chapter 11 bankruptcy proceedings. Futures Force Even if the Flowers-led group buys only the futures brokerage, it will become an immediate force in a market that traded more than a $1,000 trillion in contracts last year. Refco is the largest provider of customer-transaction volume to the Chicago Mercantile Exchange, itself the biggest U.S. derivatives exchange. The company processed 654 million derivative contracts for the fiscal year ended Feb. 28, 2005, more than the numbers traded on the Chicago Board of Trade, the Chicago Board Options Exchange, or the New York Mercantile Exchange during the same period. Abadi said Goldman denied his group access to due diligence on Refco and he plans to challenge any sales to the Flowers-led group in court. Any deal with Flowers is ``a set-up'' because the negotiations were with his former colleagues at Goldman, Abadi said. Goldman's head spokesman in New York, Lucas Van Praag, declined to comment. Calls and e-mails to Christopher Flowers weren't returned. Rob Solomon, a Refco spokesman in New York, didn't return calls. Flowers Flowers, 47, left Goldman in 1998 after more than 20 years with the New York-based firm. He founded New York-based J.C. Flowers in 2000. As a private-equity investor, Flowers made a splash by participating in the first foreign takeover of a Japanese bank, Shinsei Bank Ltd., among the most profitable buyouts ever. Lately, he has been on a buying spree. In August, J.C. Flowers led a group of investors that agreed to buy Dutch investment bank NIB Capital NV for 2.1 billion euros ($2.54 billion). Last month, the firm agreed to buy the U.S. wholesale unit of New York-based insurance broker Marsh & McLennan Cos. Snowball Effect Refco hired Goldman on Oct. 13. The same day, it placed a 15- day moratorium on all activities at Refco Capital Markets, an unregulated securities and foreign-exchange broker that includes securities-lending business and prime brokerage for hedge funds. The unit was running out of cash. Abadi said Refco Capital Markets has $3 billion in client deposits. On Oct. 14, Refco Securities, overseen by the SEC started winding down outstanding positions and said it wouldn't take on new business. Refco LLC, the futures brokerage, is regulated by the Commodity Futures Trading Commission. The day Refco disclosed Bennett's cover-up the company also advised investors not to rely on its financial statements. ``There would be a snowballing effect if Refco was to continue in business with its financial statements in question,'' Robert Heim, a former Securities and Exchange Commission enforcement attorney who is now a partner at Meyers & Heim LLP in New York, said in an interview yesterday. ``Depositors would increase the rate at which they moved money out of Refco.'' Singapore, India Earlier today, Refco (Singapore) Pte., the local unit of Refco Inc., said customers had cut futures trading and withdrawn funds. Refco Sify Securities India and Refco Capital India Pvt, two Indian affiliates, ``have been advised as an interim measure, not to increase their exposures,'' until the scope of Refco's crisis is better known, the Mumbai stock exchange said on Oct. 15. Major investment banks including JPMorgan, Lehman Brothers Inc. and Deutsche Bank AG discussed holding a meeting today to ensure there's an orderly settlement of Refco's positions, according to one person familiar with these talks who also spoke on condition on anonymity. Many of the Chicago Board of Trade's scores of independent floor traders are Refco clients, Jerome Israelov, an independent wheat trader at the CBOT who uses Refco as his broker, said in an interview from Chicago. Disruptions in Refco's business may slow trading at the CBOT, the world's biggest exchange for agricultural futures contracts, he said. IPO Investors Deceived U.S. Attorney Michael Garcia said on Oct. 12 that Bennett used a series of loan agreements to keep hundreds of millions of dollars in uncollectible debts hidden. The scheme deceived investors in Refco's $583 million August initial public offering, led by Credit Suisse First Boston, Goldman and Charlotte, North Carolina-based Bank of America. ``Character and law-enforcement issues involving the CEO of a financial-services firm will almost always prove fatal,'' Breeden said. Bennett, a U.K. native who graduated with a master's degree from Cambridge University, was arrested last week. He was freed on home detention after being ordered to wear an electronic bracelet and post a $50 million bond, plus $5 million in cash. CSFB, Bank of America and Deutsche Bank underwrote Refco's $600 million bond sale last year. They also arranged an $800 million loan, which had $644 million outstanding on May 31. The 9 percent bonds due 2012 plummeted to less than 30 cents on the dollar last week, driving the yield to more than 40 percent. Refco's shares were halted indefinitely on the New York Stock Exchange at $7.90, down 64 percent from the IPO. Thomas H. Lee Partners LP, the Boston-based buyout fund, has the biggest equity stake in Refco. To contact the reporters on this story: Adrian Cox in New York at acox2@bloomberg.net Last Updated: October 17, 2005 02:33 EDT Print
What is not clear is if the $1B offer for Refco was for the futures arm REFCO LLC or the entire REFCO Group? A $1b bid for the futures arm only seems quite rich, given that at Frudays' last price of 7.90 for RFX the ENTIRE group was valued at roughly $1B. Also, why is GS trying to rig the bid for JC Flowers or so it seems?
http://today.reuters.com/investing/..._01_WLA2575_RTRIDST_0_FINANCIAL-REFCO-MAN.XML man aint gunna touch refco. some ex gs banker could jump in....