Tone Grant, former owner of Refco, plead not guilty in January to charges of conspiracy, fraud and money laundering. Grant stands accused to of helping to hide the collapsed derivatives trading firm's enormous losses and assisting those who wanted to pass off the company to unwary investors.

The activities that lead to Refco's final, scandal-ridden explosion weren't exactly uncharted territory for a company that had for years walked close to the edge. According to the Chicago Tribune:

Refco was the subject of 142 regulatory actions, the most of any futures trading outfit, according to a Bloomberg News analysis. The Commodity Futures Trading Commission came after it repeatedly, in some of its most prominent administrative cases of the 1980s and 1990s.

Fellow trading executives say Refco flouted industry standards like no other firm, tossing aside the rulebooks, taking on the diciest accounts and fighting back against regulators that tried to intervene.

Refco traces its origins to a one-time poultry wholesaler who served time in prison for selling substandard chickens to the military. Ray Friedman eventually won a pardon and with his stepson, Thomas Dittmer, opened the forerunner of Refco around 1969.

For a full accounting of Tone Grant's tenure at Refco (1981-1998), his legal woes and how he fits into the scandal that followed the company's demise, check out the full article from the Tribune.

Grant was followed at Refco by Phillip Bennett, who managed to convert the $300 million in losses under Grant's tenure into $720 million in debt, which he managed to hide rather effectively for a time. In 2005, Refco actually seemed poised to go public with an enormous public offering, but reality intruded. The gig was up and the house of cards came crashing down.

-- MDT

Labels: Fraud, indictment, money laundering, Phillip Bennett, Refco, Tone Grant