SOURCE: Maître Frederik-Karel Canoy

July 14, 2005 08:15 ET

Thomas H. Lee Partners & Refco Group Ltd. LLC. Hit by an International Fraud Lawsuit, $1.02 Billion Claim Undisclosed in SEC Filings

PARIS -- (MARKET WIRE) -- July 14, 2005 -- Thomas H. Lee Partners, the world’s second largest buyout firm, and Refco, the world’s largest independent futures broker, both together with their legal representatives Mr. Thomas H. Lee, Mr. Scott A. Schoen & Mr. Phillip Bennett, are the target of a criminal complaint filed on June 30, 2005 with the Paris High Court. “They did not disclose in their SEC filings several major lawsuits, including criminal proceedings in Paris, and a major pending claim in New York,” the French lawyer Maître Jean-Marc Descoubes said.

The head of the plaintiff’s lawyers team is Maître Frederik-Karel Canoy, who just launched the first class action lawsuit in France to recover losses which small French shareholders incurred when telecoms and media group Vivendi Universal nearly collapsed in 2002, and whose legal actions sent its former President Mr. Meyssier into custody.

Canoy said that Refco filed with the SEC an IPO project without mentioning a major pending claim of $1.02 billion filed in the New York State Supreme Court and several civil and criminal proceedings in Paris, with claims of approximately 90 million euros.

Mr. Thomas H. Lee and Mr. Scott A. Schoen were directors in Refco Group Ltd. LLC. at the time of the filings, and some of the affiliates of Thomas H. Lee Partners hold a majority stake in this company.

Canoy said: “The Refco case is an international fraud, and false financial statements have apparently been filed with the French regulators, the Banque de France and the AMF, and with the SEC. They just did not disclose at all in their French, English and U.S. consolidated financial statements the risks associated with a $1.02 billion pending claim regarding several business torts and unjust enrichment, and major others risks, including several ongoing criminal investigations, while the President of Refco Securities S.A. in Paris was questioned by the Police on December 2004.

"Refco’s & Lee Partners’ management, Mr. Thomas H. Lee, Mr. Scott A. Schoen and Mr. Phillip R. Bennett definitely need to be taught a lesson in Courts.”

The plaintiff is a French business contributor, Gerard G. Sillam, who has enabled the futures commission merchant Refco to develop its new securities business in Europe, after the merger/takeover of Refco HL Securities SNC by Refco S.A. at the end of 2000, which resulted in the set up of Refco Securities S.A., now the REFCO Group's subsidiary in France.

The plaintiff’s claim of $500 million for unjust enrichment is still pending in the New York State Supreme Court, County of New York, against defendants Refco Group Ltd. LLC. and Refco’s President & CEO Mr. Phillip R. Bennett (index n° 602925/04). There are currently in the Refco case 3 other criminal probes.

Contact Information

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