Bennett to be sentenced

Today is the scheduled date for the sentencing hearing for Philip ("Refco") Bennett.

Here are the basics beneath the decision the sentencing judge must make.

Mr. Bennett has pleaded guilty to securities fraud, wire fraud, bank fraud, money laundering, and making false filings with the SEC. If his case is disposed of in a manner similar to that of other recent analogous cases (especially the Bayou hedge fund matter) then Bennett faces twenty or more years in prison. Assuming that he survives that (he is 60 years old) he'll be deported to the UK after his emergence again into the light of day.

He has argued for leniency on a variety of theories. In any of these battles-of-the-sentencing memos, there is of course a lot of selective picking through 'similar' cases. The defendant's counsel say, "Look! Joe Schmoe was ever worse that our client, and he received a mere five years." The prosecution responds, "Joe Schmoe wasn't as central to the conspiracy there as the defendant is to this one."

The defense replies to that, the prosecution replies to the reply, and the judge probably has his clerks read it all and provide him with a one-page summary.

If we conscientiously read through all these memoranda, though, we get the impression of eavesdropping on a debate among pre-Copernican astronomers about how many epicycles are needed to explain the motions of Jupiter.

I suspect the one-page summary from Judge Buchwald's clerks runs something like this:

Defendant claims that he has co-operated with the civil plaintiffs in the litigation that arose from the melt-down of Refco, which has helped them locate assets they need to make themselves whole. The prosecution responds that his co-operation hasn't been all it could have been. Defense says that if you don't give him leniency, you'll discourage defendants in the future from similarly co-operating, harming the plaintiffs in such situations. Prosecution replies that, fortunately, cases on this scale aren't common enough to make that a very powerful consideration.

We'll see how it plays out today.