The former CEO of Refco Inc. was charged with securities fraud Wednesday as shares of one of the world’s largest commodities and futures brokers continued to fall.

The U.S. Attorney’s Office for the Southern District of New York charged Phillip Bennett with securities fraud over hundreds of millions of dollars in transactions owed to the company by an entity he controlled.

Federal prosecutors accused Bennett of falsifying the company’s books and misleading investors who bought nearly $600 million of stock when it became publicly traded in August.

Bennett and others concealed related party transactions between Refco and the other company, alleged prosecutors. This made the company look stronger than it was during its initial public offering.

Bennett owned about 34% of Refco when it went public.

The investigation is continuing.

On Tuesday, Refco disclosed that a US$430 million receivable held by a company controlled by Bennett was hidden at the bottom of quarterly and annual reports with the debts mostly uncollectible and stretching back as far as 1998.

Bennett, who joined Refco in 1981 and was appointed CEO in 1998, faces up to 20 years in prison on the securities fraud charge.

Shares of Refco have taken a beating, beginning Monday when its shares plummeted more than 30% to an all-time low.

Today, Refco Inc. shut down one of its units, citing a shortage of available cash to continue operations.

The company imposed a 15-day moratorium on all activities at Refco Capital Markets Ltd., a non-regulated arm handling a variety of over-the-counter transactions, including prime brokerage, foreign exchange, fixed-income trading, and stock lending.

Refco Inc. said in a statement that its core business — regulated futures trading — remains on solid financial footing.