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Former Refco CEO Loses ?High-Stakes Poker Game?; Gets 16 Years

By Dan Slater

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Refco Inc.’s former CEO Phillip Bennett enters Manhattan federal court for his sentencing, Thursday, July 3, 2008. (Credit: AP/Louis Lanzano)

16 years. That was the sentence given to former Refco CEO Phillip Bennett. A Brit living in New Jersey, Bennett had previously pleaded guilty after being charged in a 20-count indictment, including conspiracy to commit securities fraud, in connection with a financial cover-up that brought down Refco, one of the world’s largest commodities brokerages, almost immediately after it went public.

Here’s the report from LB colleague Chad Bray.

Refco IPO’d in August 2005. It filed for bankruptcy just weeks later — after disclosing that a $430 million debt owed to Refco by a firm controlled by Bennett had been concealed. The disclosure caused Refco’s stock value to plummet.

At today’s hearing, SDNY Judge Naomi Reice Buchwald said white-collar defendants like Bennett often “just don’t think they’ll get caught.” Buchwald continued: “You and others like you play a truly high-stakes poker game.”

Bennett, who was rep’d by Gary Naftalis, is expected to report to prison on Sept. 4. Four former Refco execs have either pleaded guilty to or been convicted of criminal charges in the matter. A long-time lawyer for Refco also is facing criminal charges.