Refco unit sale may be a transfer of accounts -WSJ
NEW YORK, Nov 4 (Reuters) - The sale of Refco's brokerage unit is likely to entail a bulk transfer of customer accounts rather than an outright shift of the entity, because of regulatory concerns, the Wall Street Journal reported Friday.
Such an approach would be a late twist, as bids for Refco's regulated commodities and futures arm are due by Friday at 4 p.m. Eastern time (2100 GMT).
That is not expected to keep suitors away because it would achieve the same result for the buyer as an acquisition, said the paper, which cited a person familiar with the matter.
Refco, once the largest U.S. independent futures and commodities brokerage, plunged into bankruptcy last month after its chief executive, Phillip Bennett, was charged with securities fraud.
A transfer of accounts would leave the unit, Refco LLC, intact on paper and open to potential penalties for past wrongdoing. Regulators this week had objected to auction rules they believe could protect the company from such actions.
Refco said in a statement it had no intention of protecting individuals when it proposed the auction setup, which is being overseen by a federal judge as part of bankruptcy proceedings, the paper said. ADVERTISEMENT
People familiar with the matter expect Refco's futures unit to attract four to six formal bids.
Refco, its creditors and advisors will evaluate the proposals this weekend and conduct the auction next week. They expect to submit the name of the buyer in court Thursday, the paper said.
An investor group including Merrill Lynch & Co. and the firm Warburg Pincus LLC have dropped out of the running
NEW YORK, Nov 4 (Reuters) - The sale of Refco's brokerage unit is likely to entail a bulk transfer of customer accounts rather than an outright shift of the entity, because of regulatory concerns, the Wall Street Journal reported Friday.
Such an approach would be a late twist, as bids for Refco's regulated commodities and futures arm are due by Friday at 4 p.m. Eastern time (2100 GMT).
That is not expected to keep suitors away because it would achieve the same result for the buyer as an acquisition, said the paper, which cited a person familiar with the matter.
Refco, once the largest U.S. independent futures and commodities brokerage, plunged into bankruptcy last month after its chief executive, Phillip Bennett, was charged with securities fraud.
A transfer of accounts would leave the unit, Refco LLC, intact on paper and open to potential penalties for past wrongdoing. Regulators this week had objected to auction rules they believe could protect the company from such actions.
Refco said in a statement it had no intention of protecting individuals when it proposed the auction setup, which is being overseen by a federal judge as part of bankruptcy proceedings, the paper said. ADVERTISEMENT
People familiar with the matter expect Refco's futures unit to attract four to six formal bids.
Refco, its creditors and advisors will evaluate the proposals this weekend and conduct the auction next week. They expect to submit the name of the buyer in court Thursday, the paper said.
An investor group including Merrill Lynch & Co. and the firm Warburg Pincus LLC have dropped out of the running
