British brokerage Man Group passes Refco’s London operations to Marathon Asset Management
LONDON – British hedge fund and brokerage Man Group PLC said Thursday that Marathon Asset Management LLC had replaced it as the purchaser of the assets and accounts of European businesses of bankrupt U.S. brokerage Refco Inc.Man said that it had decided to pass over the business because of a “high level of client overlap” between its London business and Refco’s regulated futures brokerage, which it bought earlier this month.The Refco assets being acquired by Marathon employ more than 300 people in several European countries, with approximately 2,000 customer accounts. Marathon also will assume certain liabilities.Financial terms of the deal were not disclosed.Man, the world’s largest listed hedge fund firm, won an auction on Nov. 10 to acquire the solvent remnants of rival Refco for $282 million in cash.Refco filed for Chapter 11 bankruptcy protection on Oct. 17, just eight days after it announced a $420 million shortfall in its books. Refco Chief Executive Phillip Bennett took responsibility for the money, taking out a loan to pay it back just before the company placed him on indefinite leave Oct. 10.Bennett was arrested the following evening and was indicted the same day that Man won the auction on charges of securities fraud and wire fraud in the U.S. District Court in Manhattan. He remains free on a $50 million bond. The questionable accounting led Refco’s customers to flee the company in droves, resulting in a crippling loss of assets that ultimately forced bankruptcy.