Yahoo!/Reuters: Refco files for bankruptcy. Troubled commodities brokerage Refco Inc. said on Monday it had filed for bankruptcy protection as it struck a deal to sell its core futures brokerage business to a group of private equity investors for $768 million.
9 1/2 Weeks — No, not that “erotic psychodrama” with Mickey Rourke and Kim Basinger. I mean the amount of time that roughly passed between Refco’s IPO and its bankruptcy filing. Here are the rest of the Refco contracts, as promised — uncensored, and uncut.
This must count as a spoiler. In Refco’s Form S-1, it disclosed the following risk factor:
We will be exposed to risks relating to the evaluation of our internal controls over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002.
We are in the process of evaluating, testing and implementing internal controls over financial reporting to enable management to report on, and our independent registered accounting firm to attest to, such internal controls as required by Section 404 of the Sarbanes-Oxley Act of 2002. While we anticipate being compliant with the requirements of Section 404 by our February 28, 2007 deadline, we cannot be certain as to the timing of the completion of our evaluation, testing and remediation actions or the impact of the same on our operations. If we are not able to implement the requirements of Section 404 in a timely manner or with adequate compliance, we may be subject to investigation and sanctions by regulatory authorities, such as the Securities and Exchange Commission and the New York Stock Exchange. As a result, there could be a negative reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. In addition, we may be required to incur costs in improving our internal controls and the hiring of additional personnel. Any such actions could negatively affect our results of operations.
Well, they were right.