Phillip Roger Bennett (born 1948) is the former
CEO of
Refco, Inc. He is a British citizen who was educated at
Cambridge University
The University of Cambridge is a Public university, public collegiate university, collegiate research university in Cambridge, England. Founded in 1209 and granted a royal charter by Henry III of England, Henry III in 1231, Cambridge is the world' ...
. In the 1970s, he worked for
Chase Manhattan Bank
JPMorgan Chase Bank, N.A., doing business as Chase Bank or often as Chase, is an American national bank headquartered in New York City, that constitutes the consumer and commercial banking subsidiary of the U.S. multinational banking and fi ...
. He joined Refco in 1981 and became the firm's
chief financial officer in 1983. In 1998, chief executive officer Thomas Dittmer retired and Bennett took the job.
Refco scandal
On October 10, 2005, it was revealed that Bennett had hidden roughly $430 million of bad debt from the company's auditors and investors. On October 12, he was charged with and arrested for securities fraud. Shares in Refco then proceeded to drop from $28 per share to $0.08 per share, before being halted and then delisted from the
NYSE
The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its liste ...
. Confidence among the brokerage's customer base evaporated and Refco was bankrupt within seven days of the scandal breaking.
Bennett had been buying bad debts from Refco in order to prevent the company from needing to write them off, and was paying for the bad loans with money borrowed by Refco itself. Between 2002 and 2005, he arranged at the end of every quarter for a Refco subsidiary to lend money to a hedge fund called Liberty Corner Capital Strategy, which then lent the money to Refco Group Holdings, Inc (a company he controlled and owned).
Liberty Corner then paid the money back to Refco, leaving Liberty Corner as the apparent borrower when financial statements were prepared. Upon their maturity—timed to occur after the end of Refco's reporting period—the loans were "unwound" (supposedly without the knowledge of Refco's auditors). This meant that Refco Group Holdings. Inc. was put back in the position of owing the same amount of debt to Refco that it owed before it borrowed the money from Liberty Corner. Thus on paper, these debts remained hidden from one quarter to another.
Bennett, a former resident of
Gladstone, New Jersey
Gladstone is an unincorporated community located within Peapack-Gladstone in Somerset County, New Jersey, United States. The area is served as United States Postal Service ZIP Code 07934.[Refco
Refco was a New York City-based financial services company, primarily known as a broker of commodities and futures contracts. It was founded in 1969 by Raymond Earl Friedman as Ray E. Friedman and Co. Prior to its collapse in October, 2005, the ...]
References
Sources
* "Bennett's Refco Scheme Exposed by Late-Night Hunch: 'It Hit Me'", ''Bloomberg News'', October 27, 2005
{{DEFAULTSORT:Bennett, Phillip R.
1948 births
Living people
British chief financial officers
British chief executives
People from Peapack-Gladstone, New Jersey