On June 29, 2007, the Honorable Gerard E. Lynch granted final approval to the partial settlement reached between Lead Plaintiffs and defendant BAWAG for a total of $140 million (the “BAWAG Settlement”).  In doing so, Judge Lynch found the settlement to be fair, reasonable and adequate to the Class.  As part of the final approval opinion, Judge Lynch also certified as a Class for settlement purposes “…all persons and entities that purchased or otherwise acquired Refco Group Ltd., LLC/Refco Finance Inc. 9% Senior Subordinated Notes due 2012 and/or common stock of Refco, Inc. during the period August 5, 2004 through and including October 17, 2005 and who were damaged thereby (subject to certain exceptions).”

March 5, 2007 – Judge Lynch Grants Preliminary Approval to BAWAG Settlement

On March 5, 2007, the Honorable Gerard E. Lynch preliminarily certified as a Class “…all persons and entities that purchased or otherwise acquired Refco Group Ltd., LLC/Refco Finance Inc. 9% Senior Subordinated Notes due 2012 (CUSIP Nos. 75866HAAS and/or 75866HAC1) and/or common stock of Refco, Inc. (CUSIP No. 7566G109) during the period August 5, 2004 through and including October 17, 2005 and who were damaged thereby (subject to certain exceptions).” Judge Lynch also granted preliminary approval to the partial settlement reached between Lead Plaintiffs and defendant BAWAG and scheduled a hearing (the “Settlement Hearing”) to take place on June 29, 2007 at the United States Courthouse, 500 Pearl Street, New York, NY, 1007. The purpose of the Settlement Hearing will be to determine, among other things, whether the proposed settlement with BAWAG is fair, reasonable and adequate to the Class and whether it should be approved by the Court. Click here to view Judge Lynch’s Opinion. Click here to view all Court Orders.

February 22, 2007 - Lead Plaintiffs Submit Revised BAWAG Settlement to Court for Preliminary Approval

On February 22, 2007, Lead Plaintiffs submitted a revised BAWAG settlement to Judge Lynch for preliminary approval and certification of the settlement class. The settlement has been revised to include language agreed between the parties regarding certain effects the settlement may have on the remainder of the litigation. Although certain terms of the settlement agreement have been revised, the amounts involved in the settlement remain the same. If the settlement is preliminarily approved, notice explaining the deal in greater detail will thereafter be sent to Class members, who will have an opportunity to file any formal objections they may have before a final approval hearing is held by Judge Lynch sometime in the Fall. The timing of the distribution of the funds recovered in this settlement to Class members has not yet been determined. Click here to view the associated filings on our Lead Plaintiff Filings page.

September 8, 2006 - Lead Plaintiffs Present the BAWAG Settlement to Court for Preliminary Approval

On September 8, 2006, Lead Plaintiffs presented the BAWAG settlement to Judge Lynch for preliminary approval and certification of the settlement class. If the settlement is preliminarily approved, notice explaining the deal in greater detail will thereafter be sent to Class members, who will have an opportunity to file any formal objections they may have before a final approval hearing is held by Judge Lynch sometime in the Fall. The timing of the distribution of the funds recovered in this settlement to Class members has not yet been determined. Click here to view the associated filings on our Lead Plaintiff Filings page.

June 5, 2006 - Lead Plaintiffs Announce Settlement With Austrian Bank BAWAG for Payment of at Least $108 Million in Cash and Cooperation Against Others Who Played Role in Refco Affair;

On June 5, 2006, RH Capital Associates LLC and Pacific Investment Management Company LLC, the institutional investors appointed by U.S. District Judge Gerard E. Lynch to serve as Lead Plaintiffs on behalf of investors victimized by the Refco affair, signed a settlement agreement with BAWAG P.S.K. Bank für Arbeit und Wirtschaft und Österreichische Postsparkasse Aktiengesellschaft, an Austrian bank that had been sued for securities fraud by Lead Plaintiffs. Pursuant to the agreement, BAWAG has agreed to pay to Lead Plaintiffs, on behalf of the Class, at least $108 million in cash, with the possibility of an additional payment of up to $32 million when BAWAG is sold in the coming months.

In addition to the cash payment(s), BAWAG has pledged to cooperate with Lead Plaintiffs as they pursue the Class’ claims against other current (and prospective) defendants in the consolidated securities class action.  Indeed, BAWAG began to assist Lead Plaintiffs before the settlement agreement was formally signed, making available for Lead Counsel’s review a large cache of documents referring to the various roles played by Refco insiders and Refco’s bankers, lawyers, and auditors.

The settlement resolves two categories of claims asserted against BAWAG in the Refco class action, namely, claims arising from Refco’s bond and stock offerings in 2004 and 2005, and claims arising out of the purchase of Refco securities in the open market between August 5, 2004 and October 17, 2005 . As part of the settlement, the Class’ claims against BAWAG will be released.

The settlement between Lead Plaintiffs and BAWAG is an integral part of a set of settlements recently reached between BAWAG and various parties, including Lead Plaintiffs, the United States Attorney for the Southern District of New York (“USAO”) and the Official Committee of Unsecured Creditors in the Refco bankruptcy proceedings. In order to facilitate BAWAG’s ability to achieve global resolution of its potential liability relative to Refco, Lead Plaintiffs have agreed that certain funds they may obtain from a restitution fund that the USAO is establishing for victims of the Refco debacle (and funded by BAWAG) will be credited as partial payment of BAWAG’s obligations under this agreement. The agreement specifically provides, however, that BAWAG remains absolutely obligated to make the payments to the Class required under the deal if, for any reason, the funds obtained through the restitution fund fall short of the required amounts.

This is the first settlement achieved for the Class in the Refco Securities Litigation. Lead Plaintiffs will continue to pursue the Class’ claims against the remaining defendants, which include several former Refco insiders (including former CEO Phillip Bennett), Refco’s former board of directors, Refco’s former auditor (Grant Thornton LLP), the investment banking concern that helped take Refco “public” in August 2005 (Thomas H. Lee Partners L.P. and related entities), and several investment banks that sold Refco stocks and bonds to public investors (including Goldman Sachs, Credit Suisse and Bank of America). Lead Plaintiffs are also evaluating the role and potential liability of other participants in the Refco scandal.

The attorneys who worked to achieve this settlement are partners Sean Coffey and Salvatore Graziano and associates John Browne and Jeremy Robinson of Bernstein Litowitz Berger & Grossmann LLP, and partners Stuart Grant, James Sabella, and Megan McIntyre and associates Jonathan Margolis and Christine Mackintosh of Grant & Eisenhofer P.A. Their work prosecuting the Class’ claims against other defendants in the Refco debacle continues.