Ernst & Young and Grant Thornton may find themselves fending off legal claims of professional negligence and fraud from Refco shareholders in the wake of a report from the defunct financial company's bankruptcy examiner.

Refco went bust in 2005 after a series of "round trip" loans were uncovered that showed the company tried to hide bad debts just before an audit or the close of an accounting period. A report from Joshua Hochberg, an examiner appointed by the bankruptcy court, points the blame at Grant Thornton, which took over the auditing of Refco from Arthur Andersen, and Ernst & Young, which served as Refco's tax advisor.

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