Refco has been forced to close its Refco Capital Markets division, initially for 15 days, in the wake of a scandal that swept the company. The firm said the unit had "insufficient liquidity to continue operations," while trading in the firm's shares was halted for the second time in a week on the back of the announcement.
Following an incredible week for Refco, in which the brokerage's chief executive Phil Bennett was ousted, arrested on securities fraud charges and forced to repay hundreds of millions of dollars in debts owed to the firm, some industry executives have seen further cracks that could ultimately lead to the company's complete collapse.
Bennett was arrested on 12 October by the US attorney's office, assisted by a number of federal agencies including Commodity Futures Trading Commission and Securities and Exchange Commission (SEC).
US attorney Michael Garcia told reporters at a press conference that Bennett...