CEO, who owned about 34 percent of Refco when it went public, "hid from investors and regulators the debt of hundreds of millions of dollars that one of Bennett's companies owed to Refco," said U.S. Attorney Michael Garcia. Bennett appeared in a Manhattan court on Wednesday where a judge released him on a $50 million bond and confined him to his multimillion dollar penthouse apartment on Park Avenue in Manhattan. Since the scandal erupted, Refco shares have plummeted more than 60 percent from a closing price of $28.56 last Friday and the firm has been hit by a barrage of at least nine lawsuits on behalf of shareholders who have lost on Refco investments. Refco shares were halted before trading started on Thursday and had last traded at $10.85 on the New York Stock Exchange on Wednesday. In premarket trade on Thursday they were down $2.85 at $8. Separately, Refco said in a statement that it hired former U.S. Securities and Exchange Commission Chairman Arthur Levitt and former U.S. Comptroller of the Currency Eugene Ludwig as special advisers to its board. It also retained Goldman Sachs & Co. as its financial adviser.
