Ex-Refco Employee Named in Complaint

The government levied fraud charges against a former employee of global futures broker Refco Inc. in connection with orders involving California money manager Jay Goldinger.

Constantine Mitsopoulos, who ran Refco’s trading desk at the Chicago Board of Trade, and three other ex-Refco employees violated commodities laws when they took Treasury futures orders from Goldinger without account numbers, enabling him to decide who made and who lost money, the Commodity Futures Trading Commission alleged.

Goldinger’s investment consulting firm, Capital Insight Brokerage of Beverly Hills, collapsed after losing about $100 million of clients’ funds in 1995 after wrong-way bets on interest rates.

Mitsopoulos “committed fraud by breaching his duty to pursue the best possible price for customers,” the CFTC alleged in a 12-page complaint. In 1994 and 1995 he received about $13 million from commissions on the trades, the complaint said.

Goldinger and Capital Insight were not identified by name in the complaint. Lawyers familiar with the matter said Goldinger was the person who placed the trades through Mitsopoulos.

Mitsopoulos agreed in January to pay a $1-million fine to the Chicago Board of Trade, neither admitting nor denying any wrongdoing. His attorney could not be immediately reached for comment. Goldinger’s lawyer declined to comment.

The commission also charged three former Refco phone clerks--Margaret Dull, Lisa Budicak and Richard Marisie--with violating order-taking and record-keeping rules. Budicak, Dull, Marisie and Mitsopoulos could not be reached for comment.

In 1994 and 1995, Goldinger sent Mitsopoulos orders for thousands of Treasury bond futures and options on behalf of customers whose funds were in about 70 Refco accounts, the complaint said. Only after the trades were executed did Goldinger allocate trades among his customers, the commission alleged.