Regulators are considering liquidating a unit of brokerage firm Refco Inc. that isn't under bankruptcy-court protection.

The Securities and Exchange Commission and the Securities Investor Protection Corp. are unhappy with a recent court order directing the Refco Securities LLC unit to transfer customer assets to certain creditors. The SIPC is an agency chartered by Congress to help customers of bankrupt securities brokers get their money back.

The securities unit has been winding down operations since Refco sought bankruptcy-court protection in October. In mid-December, a Bankruptcy Court judge in Manhattan ordered the unit to return $117 million to creditors who said that the funds had been improperly transferred from an unregulated offshore unit, Refco Capital Markets Ltd.

According to court papers, Refco Securities still has 550 customer accounts, containing about $14 million, but the SEC and SIPC said that the language of the court order could be used to prohibit customers from recovering their assets. The remaining accounts hold about $14 million.

Parent company Refco went public this summer, raising $583 million in its initial public offering. In October, after the business disclosed an SEC investigation into irregular accounting practices, a freefalling stock price erased about $2 billion in market capitalization and the firm entered into one of the largest Chapter 11 bankruptcies in history.

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