Refco's Bennett Falls Hard

In a press release Tuesday, Refco disclosed sketchy details of the scheme Bennett allegedly employed to hide the transfer of the bad debt to a private company he controlled. Refco didn't identify Bennett's company, which TheStreet.com has learned is Refco Group Holdings Inc., or the "third party customer account" that served as straw man in the alleged plot.

Officials with Liberty Corner, which was founded in 1999 by Terry Pigott, a former executive vice president of asset management at Daiwa Securities, said the entity referenced is Liberty Corner Capital Strategies, "which is solely owned by Terry Pigott."

In an interview with The Wall Street Journal, Pigott denied any knowledge of the alleged scheme.

It's not the first time Liberty Corner has been linked to a financial scandal.

Earlier this year, Liberty Corner Cash Management, an affiliated entity, was fired by Ohio Treasurer Jennette Bradley from a lucrative money-management job. The firm had close ties to a political associate of Joe Deters, the state's former treasurer who got embroiled in pay-for-play scandal. A spokesman for Bradley confirmed Liberty Corner's firing, which was first reported in February by The Cleveland Plain Dealer.

Nobody from Liberty Advisors or Liberty Cash Management was charged in the episode, or accused of any wrongdoing.

Liberty Corner was caught up in the scandal because it employed Deters' former chief of staff and campaign manager as its lobbyist in Ohio and got a number of money management jobs from Deters' office.

The scandal ultimately led to the conviction of three of Deters' political associates, including Matthew Borges, the former chief of staff who worked as Liberty Corner's lobbyist.

So far, Refco has done little to clarify the scandal to investors. As a result, it has been difficult not to draw the conclusion that Bennett's debt transference was a scheme to burnish the company's balance sheet ahead of its IPO.