Updated from 2:55 p.m. EDT

Embattled derivatives broker Refco ( RFX) began putting distance between itself and ousted CEO Phillip Bennett Tuesday, describing in sketchy detail an elaborate plot to conceal Bennett's connection to hundreds of millions of dollars owed to the newly public company.

In a statement that adds as much murk as it does clarity to the day-old scandal, Refco said a company controlled by Bennett accrued the $430 million debt through the transfer of third-party obligations that were originally owed to Refco. The loans, which were of low quality and unlikely to be repaid, date as far back as 1998.

"These obligations were transferred periodically to the entity controlled by Mr. Bennett, and the company's books and records then reflected a receivable from that entity, rather than a receivable from the originating accounts," Refco said. Why Bennett would effect such a transfer was not explained. Generally speaking, a company like Refco, in which Bennett owns a 33% stake, wants to show as few nonperforming loans as possible on its balance sheet.

News of the accounting boondoggle, which has prompted an informal investigation by the Securities and Exchange Commission, lopped 45% from the company's market capitalization in frenzied trading Monday. After a lengthy trading halt, the stock lost another $1.75, or 11%, to $13.85 on Tuesday.

Bennett's lawyer, Jack Weinberg, declined to comment.

In opaque language, the company outlined the subterfuge that apparently prevented its accountants from identifying the $430 million receivable as emanating from a related party. That failure led Refco on Monday to scrap four years' worth of financial statements, saying they were unreliable.

Bennett's connection to the debt was hidden at the end of quarterly and annual reporting periods via "transfers to a third-party customer account that we currently believe is unaffiliated with Mr. Bennett or anyone else at the company," Refco said. Refco didn't expand on the customer account.

Bennett paid the money back with interest on Monday. The company hasn't said where Bennett got the money to pay off the debt. While technically on voluntary leave, he was replaced on a permanent basis as CEO by William Sexton, who had been in the process of resigning as chief operating officer.

Bennett pocketed more than $118 million in the firm's August initial public offering and also raked in tens of millions of dollars extra from a special post-IPO dividend paid by Refco.

Monday's disclosure led Standard & Poor's to downgrade Refco's debt Monday afternoon. Moody's Investors Service on Tuesday followed S&P in downgrading some of its $1 billion debt.

S&P analyst Tom Foley, who issued the downgrade, said the situation at Refco is a "pretty unique."

Sources, meanwhile, have told TheStreet.com that the SEC, which is close to sanctioning the firm in a separate matter involving its role in a private stock placement, has begun to look into the new scandal. SEC lawyers first learned of the Bennett debt late Sunday.

One thing regulators could focus on is whether Bennett deliberately hid his role at the company that received the Refco debt in order to ensure that the IPO went forward. If Bennett's interest in the entity or the poor quality of the underlying receivables were fully disclosed to investors, it's possible the IPO might have priced at a lower valuation.

A person familiar with the situation at Refco says the obligations transferred by Bennett most likely were unpaid margin loans made by Refco to its customers, including hedge funds.

It's believed that the Bennett-controlled entity is Refco Group Holdings Inc., which at one time was jointly owned by Bennett and Refco's former CEO, Tone Grant. Corporate filings say Refco Group Holdings is now wholly owned by Bennett.

In August 2004, when the big buyout firm Thomas H. Lee Partners purchased a majority equity stake in Refco, Bennett used Refco Group Holdings to hold his substantial equity investment in the brokerage. Refco Group Holdings was the main entity through which Bennett exercised ownership over Refco when it was a private company.

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