Man Group plc is buying the customer accounts, balances and certain other assets of troubled futures trading firm Refco LLC for US$282 million in cash.

Meanwhile, a grand jury has charged ex-Refco CEO Philip Bennett with conspiracy to commit securities fraud.

Fitch Ratings today affirmed its ratings on Man Group following the announcement. “The acquisition of a primarily retail regulated futures brokerage is complementary to Man’s existing futures and options brokerage in Man Financial,” it says.

“The risk profile of the business Man is purchasing is relatively low: operational risk, arising from the reliance on IT infrastructure to process a vast number of transactions and potential employee misconduct would appear to be the main risk it faces,” it adds. “Liquidity risk could arise in extreme instances of market dislocation, but credit and market risks are generally small.”

“Importantly, the way in which Man is acquiring the franchise appears to nullify the risk that Man might be exposed to compensation claims from potential litigants following Refco’s collapse,” Fitch says. The purchase price consists of US$282 million in cash, the assumption of US$37 million of liabilities and other consideration of US$4 million. It will be buying US$115 million of tangible assets, mainly the market value of exchange seats.

Fitch says that the price is not excessive in relation to Man’s cash resources, although an estimated additional US$200 million of previously “free” cash will effectively be tied up in supporting new regulatory capital requirements, which will reduce financial flexibility.

“However, Man’s cash generation capacity is such that this should be repaired relatively quickly, even if the acquisition itself is not expected to be EPS-enhancing before integration costs until the financial year starting April 2007,” it adds.