BusinessBusiness RecoveryAuditors, banks and lawyers face £1bn Refco lawsuit

Auditors, banks and lawyers face £1bn Refco lawsuit

Stock broking firm suing professional advisers for damages alleged role in 'looting' of company

grant thornton

Grant Thornton are among those being sued

Grant Thornton, Ernst &
Young and PwC along with global investment banks
Credit Suisse Securities (USA), Bank
of America and Deutsche Bank Securities and Chicago law firm Mayer, Brown, Rowe
& Maw, have all been named in a $2bn (£1bn) lawsuit brought by the
bankruptcy trustee of failed stockbroker
Refco.

The trustee is suing for damages for the firms’ alleged role in ‘looting’
Refco.

The decision to sue the three accounting firms as well as the law firm
signals, according to a report in the FT, a trend by aggrieved parties
in securities fraud cases to increasingly target professional advisers.

The decision to sue came a month after an independent examiner into Refco
appointed by a New York bankruptcy court said Refco’s creditors had viable legal
claims against the firm’s lawyers and accountants.

Further reading:

Firms face Refco fraud action

Ex-Refco CFO charged over billion-dollar fraud

The year that was 2005

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