The independent expert’s report on Wednesday that Refco’s creditors have viable legal claims against the bankrupt brokers’ lawyers and accountants shines a spotlight on efforts to hold professional firms accountable when public companies are accused of fraud.
Joshua Hochberg, an independent expert appointed by the New York bankruptcy court, spent 11 months investigating the events leading up to Refco’s collapse in October 2005.
The company, which had gone public five months earlier, was valued at $4bn before it revealed that its former chief executive Phillip Bennett had failed to disclose a $430m debt he owed the company.
The debt allegedly stemmed from client losses and was concealed using a roundtrip loan scheme.
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