French Refco traders seek compensation - report
Two traders employed by the French arm of collapsed US brokerage Refco are reportedly seeking damages from the firm after they worked without pay or formal contracts.
The two traders told the Financial Times that they started work as proprietary traders at Refco SA in 2003, but resigned in the summer of 2004 without having been paid or given French employment contracts. Instead Refco gave the men 'trading agreements' subject to UK law under its international operation, Refco Overseas Ltd. These agreements promised the men 40% of any profits they made through trading activities, but also apparently compelled them to pay commission back to Refco, the newspaper reported. The traders have taken Refco to a French employment tribunal claiming several thousand euros in lost salaries. Refco risks finding that its employment practices ran contrary to French employment law that guarantees minimum salaries and expects employees to be registered with the state and given formal contacts. The case comes as a further blow to Refco, which collapsed following the revelation that former CEO Phillip Bennett hid a $430 million debt in a holding company.
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