HARTFORD, Conn., Oct. 11, 2005 (PRIMEZONE) -- The law firm of Schatz & Nobel, P.C., which has significant experience representing investors in prosecuting claims of securities fraud, announces that a lawsuit seeking class action status has been filed in the United States District Court for the Southern District of New York on behalf of all persons who purchased the common stock of Refco, Inc. (NYSE:RFX) ("the Company") between August 11, 2005 and October 7, 2005 (the "Class Period"). Also included are all those who purchased the common stock of Refco pursuant and/or traceable to the Company's initial public offering ("IPO") on or about August 11, 2005.
The Complaint alleges Refco violated federal securities laws by issuing a series of materially false and misleading statements in the Registration Statement (the "Registration Statement") and Prospectus (the "Prospectus") prepared and disseminated by defendants in connection with the IPO. In the IPO, 26.5 million shares of Refco's common stock were sold to the public, thereby raising approximately $583 million. Refco has now admitted that those financial statements should no longer be relied upon and will likely be restated. In a section entitled "Certain Relationships And Related Transactions", the Prospectus purported to detail all of the related party transactions concerning its business. The Prospectus, however, failed to disclose the related-party loan of $430 million to an entity controlled by Phillip R. Bennett, its Chief Executive Officer and Chairman and controlling shareholder.
On October 10, 2005, Refco announced that Bennett, was being placed on a leave of absence and that the Company had discovered a receivable of $430 million owed by Bennett to the Company. Refco also announced that based on the undisclosed related party transaction, its prior financial statements should not be relied upon. On this news, the price of Refco common stock declined from $28.56 to $15.60 per share.
If you are a member of the class, you may, no later than December 12, 2005, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members, including decisions concerning settlement. The securities laws require the Court to consider the class member(s) with the largest financial interest as presumptively the most adequate lead plaintiff(s).
While Schatz & Nobel has not filed a lawsuit against the defendants, to view a copy of the Complaint initiating the class action or for more information about the case, class action cases in general, and your rights, please contact Schatz & Nobel toll-free at (800) 797-5499, or by e-mail at sn06106@aol.com, or visit our website: www.snlaw.net.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca