Former Refco CEO sentenced to 16 years in prison

Forbes ^ | 07.03.08 | Dan Wilchins

[LomanBill]

NEW YORK (Reuters) - Phillip Bennett, the former chief executive of Refco, was sentenced to 16 years in prison Thursday for fleecing investors of more than $2.4 billion in a fraud that destroyed the world's largest independent commodities broker.

The sentence marks the latest chapter in the decline and fall of Phillip Bennett, 59, who built Refco into a global commodities trading empire only to see it unravel in 2005 after the company disclosed an accounting deception.

...

Bennett, who at Refco's peak was a billionaire, but will forfeit all his assets as part of his sentence, was penitent on Thursday.

...

Prosecutors said Bennett conducted his fraud over eight years. In the late 1990s, a series of Refco loans to customers went bad. Bennett engineered fraudulent transactions to take the bad debt off the company's balance sheet at the end of reporting periods, so investors and others would not know about them. He engaged in other maneuvers designed to hide Refco's lack of cash flow as well, prosecutors said.

When $430 million of bad customer debt was revealed in October 2005, customers lost faith in the brokerage and it filed for bankruptcy.

....

Corporate criminals today typically face tougher punishment than a generation ago. In 1990, Michael Milken served just 22 months in prison after pleading guilty to securities fraud.

The maximum possible sentence Bennett could have received under U.S. law was 315 years prison.

The Refco case is not over. Yet to be sentenced are ex-CFO Robert Trosten, who also has pleaded guilty, and former President Tone Grant, who was found guilty in April of five criminal counts. An outside lawyer for the company, Joseph Collins, is set to go on trial next year.

[LomanBill]

 

 

The jurors were next asked to determine Socrates' penalty. His accusers argued for the death penalty. Socrates was given the opportunity to suggest his own punishment and could probably have avoided death by recommending exile. Instead, the philosopher initially offered the sarcastic recommendation that he be rewarded for his actions. When pressed for a realistic punishment, he proposed that he be fined a modest sum of money. Faced with the two choices, the jury selected death for Socrates.

 

 

Suicide is for cowards.

 

 

Clean it up.

[LomanBill]

Blast from the past...

 

A close examination of her individual trades underscores Blair's pivotal role. It also shows that Robert L. "Red" Bone, who ran the Springdale, Ark., office of Ray E. Friedman and Co. (Refco), allowed Clinton to initiate and maintain many trading positions – besides the first – when she did not have enough money in her account to cover them.

 

Refco...the rest of the story

http://www.freerepublic.com/focus/f-news/1506714/posts

[montag813]

Refco was a great company for traders to deal with. The whole mess was a real shame.

[LomanBill]

>>Refco was a great company for traders to deal with.

Hillary seemed to think so.

Traders, Traitors.... so hard to tell them apart these days.

[kcvl]

Hillary Rodham Clinton was allowed to order 10 cattle futures contracts, normally a $12,000 investment, in her first commodity trade in 1978 although she had only $1,000 in her account at the time, according to trade records the White House released

The computerized records of her trades, which the White House obtained from the Chicago Mercantile Exchange, show for the first time how she was able to turn her initial investment into $6,300 overnight. In about 10 months of trading, she made nearly $100,000, relying heavily on advice from her friend James B. Blair, an experienced futures trader.

The new records also raise the possibility that some of her profits — as much as $40,000 – came from larger trades ordered by someone else and then shifted to her account

[kcvl]

Ray E. Friedman, who had been convicted more than a decade earlier of selling substandard chickens to Army troops during the Korean War. Friedman served two years in federal prison for that offense

[WoofDog123]

The greatest irony of the clinton trades is that if they were in fact mutually offset trades/straddles where she got the winning half, the losing trade was tax-deductible to the person paying them.

[LomanBill]

>>Ray E. Friedman, who had been convicted more
>>than a decade earlier of selling substandard
>>chickens to Army troops during the Korean War.

Traders...Traitors...Traders...Traitors...

Chinese...Communist...Capitalists

BOHICA.