Shareholder Class Action Filed on Behalf of Shareholders of Refco, Inc. by the Law Firm of Schiffrin & Barroway, LLP

The following statement was issued
today by the law firm of Schiffrin & Barroway, LLP:

Notice is hereby given that a class action lawsuit was filed in the United
States District Court for the Southern District of New York on behalf of all
securities purchasers of Refco, Inc. (OTC: RFXCQ) (formerly NYSE: RFX)
("Refco" or the "Company") between August 11, 2005 and October 13, 2005,
inclusive (the "Class Period"), including purchasers of Refco stock pursuant
or traceable to the registration statement as amended on August 10, 2005
("Registration Statement"), and the prospectus dated August 11, 2005 issued in
connection with the Company's initial public offering on or about August 11,
2005 (the "Offering" or the "IPO").
If you wish to discuss this action or have any questions concerning this
notice or your rights or interests with respect to these matters, please
contact Schiffrin & Barroway, LLP (Darren J. Check, Esq. or Richard A.
Maniskas, Esq.) toll-free at 1-888-299-7706 or 1-610-667-7706, or via e-mail
at info@sbclasslaw.com.
The complaint charges Phillip R. Bennett, Gerald M. Sherer, Leo R.
Breitman, Nathan Gantcher, David V. Harkins, Scott L. Jaeckel, Thomas H. Lee,
Ronald L. O'Kelley, Scott A. Schoen, Grant Thornton LLP, Credit Suisse First
Boston, Goldman Sachs & Co., Banc Of America Securities LLC, Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities, Inc., J.P.
Morgan Securities Inc., Liberty Corner Capital, and Refco Group Holdings Inc.
with violations of the Securities Exchange Act of 1934. More specifically,
the Complaint alleges that the Company failed to disclose and misrepresented
the following material adverse facts which were known to defendants or
recklessly disregarded by them: (1) that an entity controlled by defendant
Bennett owed the Company as much as $545 million in a scam designed to hide
bad debt; (2) that the Company failed to account for the $545 million in bad
debt thereby materially inflating its financial results; (3) that the Company
lacked adequate internal controls; (4) that the Company's financial results
were in violation of Generally Accepted Accounting Principles ("GAAP"); and
(5) that as a result of the foregoing the Company's financial results were
materially inflated at all relevant times.
On October 10, 2005, Refco shocked the market when it announced it had
discovered, through an internal review, a receivable owed to the Company by an
entity controlled by defendant Bennett in the amount of approximately $430
million, that Bennett was stepping down, and that Company financial statements
issued since 2002 could no longer be relied upon. After digesting this news,
the market acted swiftly and negatively. By the end of the day on October 10,
2005, shares of Refco fell $12.96 per share, or 45.3 percent, to close at
$15.60 per share on heavy trading volume.
Shares of Refco fell even further on October 11, 2005, when a more than
five-hour halt on trading was lifted at the New York Stock Exchange ("NYSE"),
following the additional disclosure that the sum of $430 million receivable
was largely comprised of uncollectible debts dating as far back as 1998. By
the day's end, shares of Refco were down $1.75 per share, or 11.22 percent, to
close at $13.85. On October 12, 2005, the United States Attorney for the
Southern District of New York announced that defendant Bennett had been
arrested and charged in a criminal complaint with having defrauded investors
in the initial public offering of securities in Refco by hiding that hundreds
of millions of dollars owed to Refco was in fact owed by a company Bennett
himself controlled. At the close of trading on October 12, 2005, shares of
Refco fell an additional $3.00 per share, or 21.66 percent, to close at $10.85
per share on heavy trading volume.
On October 13, 2005, trading of Refco shares was delayed at the opening of
the market pending news from the Company. At approximately 11:30 a.m., Refco
announced that in light of recent events, the liquidity within Refco Capital
Markets, Ltd., was no longer sufficient to continue operations. The Company
had therefore imposed a 15-day moratorium on all activities of Refco Capital
Markets, Ltd. Following this revelation, on October 13, 2005, the NYSE again
halted the trading of Refco's shares. At the time of the trading halt,
Refco's stock was trading at $7.90 per share, which represented a loss of
$2.95 per share, or 27.19 percent.
The final blow for Refco occurred on October 18, 2005, when Refco filed
for Chapter 11 bankruptcy protection after cutting a deal to sell its primary
business to a group led by hedge fund J.C. Flowers & Co. LLC. Following this
news, the NYSE lifted the halt on trading. Shares of Refco plunged $7.25 per
share, or 91.77 percent, to close at $0.65 per share on October 18, 2005.
Plaintiff seeks to recover damages on behalf of class members and is
represented by the law firm of Schiffrin & Barroway, which prosecutes class
actions in both state and federal courts throughout the country. Schiffrin &
Barroway is a driving force behind corporate governance reform, and has
recovered billions of dollars on behalf of institutional and individual
investors from the United States and around the world. For more information
about Schiffrin & Barroway, or to sign up to participate in this action
online, please visit http://www.sbclasslaw.com.
If you are a member of the class described above, you may, not later than
December 12, 2005 move the Court to serve as lead plaintiff of the class, if
you so choose. A lead plaintiff is a representative party that acts on behalf
of other class members in directing the litigation. In order to be appointed
lead plaintiff, the Court must determine that the class member's claim is
typical of the claims of other class members, and that the class member will
adequately represent the class. Under certain circumstances, one or more
class members may together serve as "lead plaintiff." Your ability to share
in any recovery is not, however, affected by the decision whether or not to
serve as a lead plaintiff. You may retain Schiffrin & Barroway, or other
counsel of your choice, to serve as your counsel in this action.

CONTACT: Schiffrin & Barroway, LLP
Darren J. Check, Esq.
Richard A. Maniskas, Esq.
280 King of Prussia Road
Radnor, PA 19087
1-888-299-7706 (toll-free) or 1-610-667-7706
Or by e-mail at info@sbclasslaw.com

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