Refco Chief Operating Officer Resigns

A month after its $583 million initial public offering, Refco(RFX) is shaking up its ranks.

The derivatives brokerage announced Monday that Chief Operating Officer William Sexton will be leaving the firm, about a year after assuming the post. The firm gave little explanation for the decision other than to say that Sexton, who had been with the company since 1999, will "pursue other interests.''

Sexton's duties will partly be assumed by Jeffery Mester, who most recently was the chief executive of ETG, a stock brokerage. Mester will report to Sandy Maggio, the president and chief executive officer of Refco Securities.

Two months ago, Refco disclosed that Maggio is likely to be punished by securities regulators for his failure to properly supervise two brokers involved in a 2001 private stock placement. The brokerage says Maggio is likely to accept a settlement that would prohibit him from serving in a supervisory role for one year.

However, the firm says the suspension won't prevent Maggio from continuing "to work for us and Refco Securities in his current capacities."

Refco, meanwhile, has established a $5 million legal reserve to cover the cost of a potential settlement with the Securities and Exchange Commission. In addition to a fine, Refco will likely have to retain an independent consultant "to review and make recommendations with respect to various business practices and procedures.''