Reply #50: Refco (Derivatives Trading Firm) down 33% after post-IPO rally

[UpInArms]

http://www.marketwatch.com/news/story.asp?guid=%7B89C01E90%2D66B8%2D483C%2D994F%2DF276767BF5ED%7D&siteid=mktw

NEW YORK (MarketWatch) -- Refco Inc. shares fell as much as 39% on Monday after the derivatives trading firm said it'll delay an upcoming financial report amid an audit committee investigation that resulted in the company's chief executive taking a leave of absence and a repayment of $430 million to the company.

Refco (RFX: news, chart, profile) said the receivable from an entity controlled by Chairman and CEO Phillip Bennett was reflected in financial statements for the years 2002-2004, as well as the first two quarters in the 2005 calendar year.

Taken as a whole, the statements "should no longer be relied upon," Refco said.

In light of the audit committee probe, units Refco Group Ltd. LLC and Refco Finance Inc. "each will likely delay" the filing of their quarterly reports, the parent said.

Shares of Refco fell $9.32, or 32.6%, to $19.24 in midday trading. At their low for the session, the shares changed hands at $17.50.

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The big stock drop marks a reversal of fortunes for Refco, which debuted its initial public offering at $22 a share in early August to keen investor interest. Refco raised $583 million in its IPO.

The stock hit a high of $30.55 on Sept. 7 and hadn't traded below $26 since the IPO.

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