PracticeAuditGrant Thornton faces Refco questions

Grant Thornton faces Refco questions

Prosecutors talk of 'staggering' losses at US broker audited by mid-tier firm

Grant Thornton is facing questions today over its auditing of Refco, the US
commodity, bond and futures broker.

Prosecutors in the US have claimed that investors in Refco, which floated two
months ago raising $583m (£332m), face ‘staggering’ losses.

One of Refco’s subsidiaries, an unregulated offshore broker for stocks, bonds
and currencies, has suspended trading amid allegations that it was used to hide
bad debts.

Refco chairman Phillip Bennett, a British-born Cambridge graduate, has been
suspended over a $430m irregularity.

The company has said that its past accounts, for 2002, 2003, 2004 and 2005
could not be relied upon.

Grant Thornton has audited Refco for three years, having taken over from
Arthur Andersen.

It has said that losses were ‘hidden’ from its scrutiny.

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