The U.S. Securities and Exchange Commission (SEC) has filed civil fraud charges against former Refco Inc. Chief Executive Phillip R. Bennett, days after he pleaded guilty to criminal charges in a scheme to mask the commodities broker's financial health, The Wall Street Journal reported on Wednesday.
The suit, filed in U.S. District Court in Manhattan on Tuesday, alleges that Bennett orchestrated a scheme to hide hundreds of millions of dollars owed to Refco by a private entity controlled by Bennett and to utilize practices that artificially inflated Refco's results.
The complaint is seeking a permanent injunction against Bennett and disgorgement of ill-gotten gains and civil penalties, according to the report.
Late week, Bennett, 59 years old, pleaded guilty to a 20-count criminal indictment, including charges of conspiracy, securities fraud, bank fraud and making false filings with the SEC.
He admitted to concealing the fraud from the company's auditors, its investors and buyout firm Thomas H. Lee Partners, which purchased a stake in Refco in 2004 and has been sued for allegedly not following up on red flags at the company.
Bennett, a British citizen, faces life in prison on the criminal charges under federal sentencing guidelines, said the report.
Source: Xinhua
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