Refco unit out of cash

Brokerage says liquidity of Refco Capital Markets insufficient, halts activities to protect value.

October 13, 2005: 12:03 PM EDT

NEW YORK (Reuters) - Refco Inc., the embattled commodities and futures brokerage, said Thursday the liquidity of its Refco Capital Markets Ltd. unit, which represents a material part of the company, is no longer sufficient to continue operations.

Refco (down $2.95 to $7.90, Research) said it would halt the unit's activities for 15 days to protect its value.

Separately, Refco said it hired former Securities and Exchange Commission Chairman Arthur Levitt and former U.S. Comptroller of the Currency Eugene Ludwig as special advisers to its board. It also retained Goldman Sachs & Co. (down $1.22 to $114.43, Research) as its financial adviser.

Refco's former chief executive, Phillip Bennett, was charged on Wednesday with securities fraud over hundreds of millions of dollars owed to the company by an entity he controlled.