A bevy of class action suits against Refco may bring little
joy to investors after the company filed for bankruptcy on 18
October. But law firms immediately turned their attention to
Refco's auditors, underwriters and officers.
At least 17 different law firms have filed class action
suits against Refco Inc and other related entities including
Refco's auditor Grant Thornton and underwriters Goldman Sachs,
Banc of America and CSFB.
One investment banking source said that the only entity
involved in the IPO which may be able to indemnify itself was
Grant Thornton. According to Refco's S-1 IPO filing made to
Securities and Exchange Commission (SEC), Grant Thornton had
pointed to potential "significant deficiencies" in Refco's
In the document these deficiencies were described, according
to Public Company Accounting Oversight Board, as liable to
result in "more than a remote likelihood that a mis-statement
of the financial statements that is more than inconsequential
will not be prevented or detected".
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