Grand Jury Indicts Refco’s Former CEO

A former chief executive of Refco Inc. was indicted Thursday by a federal grand jury in New York on charges that he hid hundreds of millions of dollars in unpaid debt.

The indictment means that Phillip R. Bennett must appear in court in coming days to enter a formal plea to the charges. The judge may also schedule a date for the trial. Bennett was arrested Oct. 11 on securities fraud charges and ordered to remain at his New York City home under house arrest.

Bennett, 57, was the only defendant charged in the eight-count indictment.

The document accuses Bennett of conspiracy, securities fraud, wire fraud and making false filings with the Securities and Exchange Commission. It also seeks to recover at least $700 million from Bennett, “representing the amount of proceeds obtained as a result of the charged wire and securities fraud offenses.”

Also Thursday, Man Group, the world’s biggest publicly traded hedge fund company, won a bankruptcy auction of the customer accounts and assets of Refco’s regulated futures-trading business with a bid of $323 million.

Man Group beat five competitors in the auction. Refco creditors have challenged the sale in filings in Bankruptcy Court. The creditors argue that some of the assets that Refco is selling belong to them.