2nd Circ. Scraps Refco Customers' Securities Fraud Suits

Law360, New York (January 10, 2012, 5:36 PM EST) -- The Second Circuit on Tuesday upheld the dismissal of three securities fraud suits that customers of bankrupt Refco Inc. subsidiary Refco Capital Markets Ltd. had brought against former officers of the company and Refco's auditor Grant Thornton LLP.

The appeals court upheld U.S. District Judge Gerard E. Lynch's dismissal for lack of standing and failure to allege deceptive conduct, tossing the customers' claims that the defendants breached agreements when they rehypothecated or otherwise used securities and other property held in customer brokerage accounts.

“We hold that...
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