SEC launches informal probe into Refco | FT
The Securities and Exchange Commission on Tuesday launched an informal inquiry, following allegations of accounting irregularities involving the former chief executive at Refco, one of the largest futures brokers.
Shares in New York-based Refco have plunged since its admission on Monday that it was owed $430m by an entity controlled by Phillip Bennett, and that the receivable was not reported in its accounts as a "œrelated party transaction".
On Tuesday Refco revealed that the receivable represented obligations, largely uncollectable, that dated as far back as 1998. These were transferred periodically to the entity controlled by Mr Bennett. Mr Bennett, who has been replaced and put on indefinite leave, repaid the receivable in full on Monday but the initial announcement prompted a 45 per cent fall in its share price to well below the $22 issue price at its initial public offering in August.......
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Black eye for burgeoning futures industry | FT
What did I say then?
(S - B) / 2 + 0.4 * (S + B) * Sigma * SQRT(T) / 2
where S is the stock price, B is the pre...
