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SEC charges Refco attorney with aiding and abetting securities law violations
By Caroline Salls
Pittsburgh, Dec. 18 - Longtime Refco Group Ltd. primary outside attorney Joseph P. Collins of Mayer Brown LLP has been charged by the Securities and Exchange Commission with aiding and abetting Refco's violations of the antifraud provisions of federal securities laws, according to a news release.
The SEC filed a civil injunctive action Tuesday against Collins in the U.S. District Court for the Southern District of New York.
According to the release, the commission's complaint alleges that while Collins was representing Refco, he learned that an entity controlled by Refco's chief executive officer owed the company hundreds of millions of dollars.
In addition, the SEC alleges that Collins worked on and supervised other attorneys who worked on short-term related party transactions that took place at the end of Refco fiscal periods from February 2000 through May 2005, under which Refco allegedly assumed hundreds of millions of dollars in potential liabilities in the form of guaranties and indemnities it extended to third parties.
The complaint also alleges that Collins revised sections of a Refco offering circular and a Refco registration statement while he was aware of the debt and short-term transaction without inserting required disclosures regarding the debt, the period-end transactions and the potential liabilities.
The SEC said it is seeking civil penalties and a permanent injunction barring Collins from violating the antifraud provisions.
The civil case number is 07 CV 11343.
Refco Group Ltd. corporate successor Refco, Inc., a New York-based commodities brokerage company, emerged from Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York on Dec. 26, 2006.
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