Wolf Popper LLP Files Securities Fraud Class Action Against Refco, Inc.

NEW YORK, Oct. 14  /PRNewswire/ -- Wolf Popper LLP has filed a securities fraud lawsuit against Refco, Inc. ("Refco") (NYSE: "RFX") and certain of its officers and directors, on behalf of a class (the "Class") consisting of all persons or entities that: (a) purchased the common stock of Refco on the open market during the period August 11, 2005 through October 7, 2005, inclusive (the "Class Period"); or (b) purchased Refco common stock issued and/or traceable to the Company's Registration Statement/Prospectus dated August 10, 2005 and declared effective by the SEC on or around August 11, 2005.  The action was filed in the United States District Court, Southern District of New York.  The complaint can be obtained from the Court or viewed on Wolf Popper's website (http://www.wolfpopper.com/).

The complaint alleges that during the Class Period, defendants caused Refco to issue a Registration Statement/Prospectus, touting the Company's exceptionally high derivative trading volume and strong financial statements. However, unbeknownst to the market, Refco hid from its investors the Company's true financial condition.  The Company materially misstated its accounts receivables by hiding $430 million in bad debt unlikely to be repaid.  Using financial sleight of hand, the Company made it appear that a legitimate business customer, a hedge-fund company called Liberty Corner, owed Refco $430 million, when in fact, a company controlled by Refco's Chief Executive Officer and Chairman of the Board owed the Company the $430 million.  This was accomplished by making loans to Liberty Corner, which turned around and lent the money to an entity controlled by Refco's Chief Executive Officer and Chairman of the Board.

On October 10, 2005, only two months after the Company's initial public offering, the Company announced that its financial statements included in its Registration Statement/Prospectus could no longer be relied on because of the previously undisclosed $430 million related party receivable.  The Company also stated that it would delay the filing of its quarterly report on Form 10-Q for the quarterly period ending August 31, 2005.  Furthermore, the Company announced that its Chief Executive Officer, Chairman, and controlling shareholder, Phillip R. Bennet, was taking a leave of absence at the request of Refco's Board of Directors.

On this news, Refco's share price plummeted 45% to $15.60 from the prior days closing of $28.56.

On October 12, 2005, Refco's Chief Executive Officer and Chairman of the Board was arrested and charged with securities fraud by the U.S. Attorney's Office for paying Liberty Corner to help him hide the money he owed Refco.  In addition, on October 13, 2005, Refco announced it would halt activities at its non-regulated Capital Markets because its liquidity was no longer sufficient to continue operations.  After these announcements, Refco's share price plummeted again, falling to a close of $7.90 on October 13, 2005.

Wolf Popper LLP has extensive experience representing shareholders in class actions and has successfully recovered billions of dollars for defrauded shareholders.

Class members who desire to be appointed a lead plaintiff in this action must file a motion with the Court no later than December 12, 2005.  Class members who are interested in serving as a lead plaintiff in this action, or other persons who have questions or information regarding the prosecution of this action, are urged to call or write:

Emily DeMuro, Investor Relations () or James

Kelly-Kowlowitz, Esq. () *  Wolf Popper LLP * 845 Third Avenue * New York * NY * 10022 Tel.: [phone] * Toll Free: 877.370.7703 *

Fax: [phone] * Toll Free Fax: [phone] Email:  

DATASOURCE: Wolf Popper LLP



CONTACT:  Emily DeMuro, Investor Relations of Wolf Popper LLP,

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Web site:  http://www.wolfpopper.com/

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