Refco suspends Chief executive

Refco, the securities and futures broker suspended its chief executive, Phillip Bennett, amid allegations that he used a hedge fund to hide $430m in debt. This has caused Refco to suspend its capital markets operations as well as hire outside advisors, including Goldman Sachs, to help to shore up confidence and stop customers from exiting the firm.
According to one Chicago futures broker, panic had set in after news emerged of the arrest of Mr. Bennett. “There is a general exodus of client money”. This is clearly not good news for Refco that generates nearly 60% of its income from its capital markets area.