From www.bankrupt.com/refco.txt VR Global Partners, LP $380,149,056 Avora Business Park 77 SADOVNICHESKAYA NAB. BLDG. 1 Moscow, Russia 115035 Bancafe International Bank Ltd $176,006,738 Carrera 11 82-76 Segundo 2 Bogota, Colombia P: 636-4349
Wonder what % of his net was tied up with his fund. I know he's real bullish on commodities, so must have been a substantial %. Real shady goings on in Refco, jail time all around. Don't forget the even more shady ipo.
hope Jim R. get a piece of the pie here while he waits for the mess to clear with refco www.cme.com/about/press/cn/05-148JRtrakrs16494.html
Rest assured Rogers is still in the saddle: http://www.cme.com/about/press/cn/05-148JRtrakrs16494.html
Rogers Funds, Refco Creditors Ask Court to Block Asset Sale Nov. 10 (Bloomberg) -- Refco Inc., the bankrupt futures broker that's auctioning off its assets and may decide on a buyer as soon as today, faces a potential obstacle from creditors who say they'll be hurt by a sale. Funds controlled by Jim Rogers that claim they're owed $362 million by Refco Inc. asked a court yesterday to reject any agreement the company reaches with a bidder. Creditors including Rogers, a former partner of hedge fund pioneer George Soros, said the proposed terms of a sale would block them from collecting from accounts that remain frozen. Refco Inc., based in New York, is trying to raise money to pay off debts after filing the 14th-largest bankruptcy in U.S. history on Oct. 17. The auction, which began yesterday morning, continued late last night, said Refco spokesman Jim Craig. ``To relegate all potentially injured parties to look solely to the sale proceeds for restitution and damages of what may amount to one of the largest U.S. corporate scandals and otherwise absolve potential defendants of any liability is unconscionable and must not be sanctioned by this court,'' the Rogers Funds said in a court filing yesterday. The U.S. Bankruptcy Court in New York should block the Refco sale ``in its entirety,'' the filing said. Craig said late last night that Refco's lawyers were at the auction and couldn't immediately comment on the objections filed by customers and creditors. Five Bidders Refco said last week that five groups submitted bids to participate in the auction. Man Group Plc, the world's biggest publicly traded hedge fund manager, Interactive Brokers Group LLC and a group led by the Dubai government said they submitted bids for Refco assets. New York buyout firm J.C. Flowers & Co. also submitted a bid, according to court documents. Refco yesterday disqualified Alaron Trading Corp., a Chicago-based futures trader specializing in individual accounts, from bidding. The auction may result in a bid of as much as $1 billion, said Alaron Managing Partner Gary Weber. Customers and creditors that also filed objections to Refco's auction include Leuthold Funds Inc., Leuthold Industrial Metals Fund LP, Inter Financial Services Ltd. Refco's Chicago landlord, West Loop Equities LLC, argued that a transaction shouldn't be approved until the landlord learns the fate of its $6 million annual rent for office space on West Jackson Avenue. Rogers Funds If the sale goes forward, the court should freeze the proceeds until it determines the status of the Rogers Funds' assets, the funds argued. The Rogers Raw Materials Fund and the smaller Rogers International Raw Materials Fund LP together are owed $362 million by Refco, according to court filings. Rogers Raw Materials Fund is listed in court papers as the fourth-biggest holder of unsecured Refco claims, with $287 million, and the other fund ranks No. 13, with $75 million. Federal prosecutors have until today to charge Refco Chief Executive Phillip Bennett, 57, unless he agrees to postpone the deadline. Bennett was arrested Oct. 12 by U.S. authorities and charged with securities fraud, prompting a customer exodus and the shutdown of several units, including Refco Capital Markets Ltd. He may face life in prison if he's convicted. The bankruptcy case is In re Refco Inc., No. 05-60006, in U.S. Bankruptcy Court, Southern District of New York.
Refco Tussle Raises Questions For 'Investment Biker' Rogers By PETER A. MCKAY Staff Reporter of THE WALL STREET JOURNAL November 10, 2005; Page C1 Investor Jim Rogers's travels to remote corners of the world, even through deserts and war zones, have earned him a reputation as a daredevil. But his commodity funds are supposed to be models of safety. Mr. Rogers's tussle with bedeviled commodity-brokerage Refco Inc. suggests his funds have been flirting with danger lately. The fight boils down to whose fault it is that the Rogers funds had more than $360 million at risk, primarily in an unregulated Refco unit based in Bermuda that engages in privately negotiated trades. Such trades are anathema to the strategy Mr. Rogers has emphasized in public appearances, regulatory filings and a book in which he wrote that the traditional pitfalls of commodity trading can easily be avoided if investors stick with exchange-listed futures contracts and refrain from using too much borrowed money. That mantra helped Mr. Rogers, an ex-partner of famed hedge-fund manager George Soros, become a high-profile guru in his own right about the long-running bull markets in crude oil, copper and other raw materials. He wrote a book about the topic last year, adding to a literary résumé that already included the popular "Investment Biker" and "Adventure Capitalist," in which the money manager ditched his trademark bow tie to tour far lands, sometimes by motorcycle, to soak up investment ideas. His legal tussle with Refco comes down to this: If the brokerage didn't follow instructions from the managers of Mr. Rogers's two funds, Refco may have violated federal commodity-trading rules protecting customers. If, on the other hand, Refco did the managers' bidding, then the funds may not have been adhering to their namesake's much-publicized musings. Mr. Rogers's lawyers have declined to comment on the Refco matter. Refco attorney J. Gregory Milmoe says the firm will "defend itself vigorously" against a suit filed by a management firm overseeing the Rogers funds that accuses Refco of mishandling the Rogers accounts. A trial is set for mid-December in bankruptcy court in New York. (The matter is going before a bankruptcy court because Refco last month filed for Chapter 11 protection from creditors for some of its units, not including the regulated ones.) Refco imploded quickly after its disclosure Oct. 10 that then-Chief Executive Phillip R. Bennett had secretly transferred about $430 million in debts to an entity he controlled. Refco's chief unregulated unit, Refco Capital Markets Ltd., has been frozen, and dozens of its customers, including the Rogers funds, are listed as creditors for Refco, which has about $17 billion in liabilities. The Rogers case is the most notable among about 45 Refco customer-creditors who are questioning whether their money belonged in unregulated units or regulated ones, which enjoy greater customer protections. And, in a twist, the brokerage says it may file a suit against the creditors to clear up the matter. Mr. Rogers has two funds -- one open to all investors, one private -- tracking an index of his own design that includes a very broad array of commodities and is up about 217% since its launch in 1998. Both funds are so-called commodity pools, which are investment funds registered with the Commodity Futures Trading Commission, the main regulator for futures markets. But now some of the Rogers investors' money is trapped: In a letter to the public Rogers International Raw Materials Fund's investors last month, Beeland Management Co., the Chicago money manager overseeing the Rogers funds' day-to-day operations, said it wouldn't be able to pay any investors looking to cash out through Oct. 31 because 63% of the fund's assets are deposited at the frozen Refco Capital Markets. (Beeland is majority-owned by Mr. Rogers.) Court filings show that fund is owed $75.2 million by the brokerage, which would peg its total assets around $119 million. The private Rogers Raw Materials Fund, also managed by Beeland, is listed as Refco's fourth-largest creditor, with $287.6 million outstanding. In his 2004 book "Hot Commodities," Mr. Rogers not only explained why he thought supply and demand would push natural-resource prices higher for more than a decade to come, but also decreed that the reason commodities had gotten a rap as a prohibitively risky investment was because most people, even on Wall Street, don't understand how to use futures contracts, the primary vehicle for placing commodity bets. Unlike the stock market, which requires that investors put up at least half the value of the trade to buy or sell shares, futures require relatively little money upfront, often a single-digit percentage of the underlying value of the commodities covered by the contracts. Thus, investors can control vast amounts of financial exposure to commodity prices using relatively little cash, known as margin. The downside: The rest of the value of the contracts, known as leverage, is like borrowed money. In bets that involve heavy leverage, investors can lose more money than they originally put up as margin if the market swings against them. Mr. Rogers posited that this risk could easily be avoided if an investor used exchange-traded futures and simply chose to put up 100% of the contracts' value, even if the market rules didn't require that. In its regulatory filings on behalf of the Rogers funds, Beeland Management seemed to spell out just such a cautious strategy. In particular, Beeland filed a revised prospectus for the public Rogers International Raw Materials Fund this fall, around the time it switched to using Refco as its primary futures broker. According to the prospectus -- which has been entered by Refco as a defense exhibit in the current lawsuit -- most of the Rogers fund's trading would be done through Refco's regulated futures unit, Refco LLC. The fund would also have an account at unregulated Refco Capital Markets, but that arm was supposed to handle only perhaps 10% to 15% of the fund's assets. The unregulated account would be used, for instance, if the fund needed to make bets to maintain its weighting on a commodity for which it had already hit exchange-imposed limits on speculative holdings of contracts. All of these arrangements became vitally important Oct. 10, when Refco customers started fleeing. In its lawsuit on behalf of the Rogers funds, Beeland included several emails, including one from Oct. 11, in which executives sought assurances the funds' assets would be in regulated accounts. Both sides agree that Beeland officials also placed several calls to Robert Mercorella, a Refco marketing executive who briefly worked as chief operating officer at Beeland earlier this year, seeking assurances that the Rogers money was in regulated accounts. In its court filings, Refco includes email messages confirming that the broker had moved $22.9 million from the regulated unit to the offshore Refco Capital Markets on Oct. 11 but says it did so at the request of Beeland. People familiar with the matter say one possible scenario for the handling of the Rogers accounts leading up to the brokerage's meltdown could've been this: The brokerage may have been keeping only the legally required margin for the Rogers funds' futures positions on deposit at regulated Refco LLC, technically leaving those accounts with the high amount of leverage customary to futures trading. At the same time, the Rogers funds' account at unregulated Refco Capital Markets could have been set aside to draw on for additional margin in case of adverse market swings. Such a setup would work seamlessly under almost any condition except one -- a bankruptcy at Refco Capital Markets, which would cut off access to what many futures brokers refer to as "excess margin." In other words, the regulated Refco business wouldn't be able to get the Rogers funds' assets from the unregulated unit. As for which side might have wanted such an arrangement, and whether it would jibe with Mr. Rogers's public disdain for leverage, it's difficult for even futures-industry veterans to say. If the Rogers funds had their minimum margin in one account and the rest of the value of their contracts in another account, did they have any leverage? "I don't know," says attorney Scott Early, a former general counsel at the Chicago Board of Trade who now represents another Refco creditor, Leuthold Weeden Capital Management. "Leverage is a term of art."
If you are an investor in the public fund, please contact me. Maybe we can coordinate on figuring out what happened and whether to take the end of November redemption option. Send to: adambc123@aol.com PLEASE no emails not related to the Rogers Fund.