ACM WINS AGAINST REFCO IN SWISS COURT
FYI latest Bloomberg story concerning ACM:
Refco Loses Control of Geneva-Based Broker, ACM Says (Update2)
2005-12-14 08:25 (New York)
(Adds comment from ACM founder in third paragraph.)
Dec. 14 (Bloomberg) -- Refco Inc., the bankrupt futures
trader, lost control of Advanced Currency Markets SA after a
Geneva court ruled that the Swiss foreign-exchange broker could
dilute Refco's stake, ACM said in an e-mailed statement.
Refco spokesman James Craig in New York declined to comment
immediately. The court decision leaves ACM in control of 74
percent of its own shares and halves Refco's stake to about 26
percent, Geneva-based ACM said today.
``The court recognized that the purpose of the capital
increase was to reassure its customers and partners following
the climate of concern around Refco's bankruptcy,'' ACM founder
Nicholas Bang said in the statement.
ACM, an independent electronic broker in the $1.9 trillion-
a-day currency market, is wrestling control of its shares to
avoid being sold or liquidated as part of Refco's bankruptcy.
Refco has more than 20 affiliated businesses after selling its
main futures assets to hedge fund company Man Group Plc to help
pay the $16.8 billion it owes creditors.
Refco filed for bankruptcy in October a week after
disclosing that former Chief Executive Phillip Bennett hid $430
million in debt from investors and auditors. Affiliates
including ACM and Forex Capital Markets LLC in New York have
been attempting to take back their own shares to protect their
business.
bought new shares on Nov. 15 to take control. Refco, the fourth-
largest U.S. futures broker before it collapsed, said it hadn't
approved ACM cutting its stake and got an injunction to stop new
shares being issued.
Defeat at the so-called first instance court means Refco
may have to sell a minority stake in ACM rather than control of
the business. Refco can appeal the court decision.
New York-based Refco bought control of ACM in July 2004 to
help it expand its currency-trading business for individual
customers in Europe and the Middle East. ACM has more than 9,000
clients who trade about $50 billion monthly.
Refco last week delayed for the second time a hearing on
the sale of its retail currency accounts. The hearing, scheduled
for tomorrow, will set bidding procedures for an auction of
15,000 individual trading accounts, a step that must be
completed before the sale can go forward.
Forex Capital, which is 35 percent-owned by Refco, bid $110
million for the accounts and its own shares. Refco was FXCM's
biggest client until it froze the accounts, which contributed 30
percent of FXCM's revenue last year.
chart of Refco's shares. See {NI FINFUT BN <GO>} for futures-
related stories and {NI DRV BN <GO>} for stories derivatives.
Malcolm Shearmur in Geneva at (41)(22) 317 9218 or
mshearmur@bloomberg.net
Frank Connelly at (33) 1 5365 5063 or fconnelly@bloomberg.net
Katherine Snyder on (44)(20) 7330 7052 ksnyder@bloomberg.net