Banks hit by Refco backlash

[emad]

Wall Street faces multimillion class action

Conal Walsh
Sunday October 16, 2005
The Observer


Goldman Sachs, CSFB and other US investment banking giants are facing a multimillion-dollar lawsuit from America's leading class-action attorney over their work as flotation advisers to Refco, the derivatives broker on the brink of collapse.

Melvyn Weiss, head of New York law firm Milberg Weiss, confirmed that he will file new court actions this week on behalf of investors who have seen their Refco shares collapse amid claims of large-scale fraud.

The brokerage, which conducts vital transactions for the hedge fund industry, has been forced to suspend many of its operations and is threatened with bankruptcy this weekend.

Weiss, who piloted massive shareholder compensation claims against Wall Street firms in the wake of the dotcom crash, said that leading banks had acted negligently in underwriting and advising on Refco's float on the New York Stock Exchange in August, which raised $583 million. He also plans to sue banks that managed bond issues for Refco.

http://observer.guardian.co.uk/business/story/0,6903,1592936,00.html

[3trievers]

1. How many times

Will these investment bankers be allowed to be up to their eyeballs in nefarious dealings and get away with paying fines? They make billions and get fined relatively low fines.Only jail for a few of these crooks will stem the seedy practices.