IPOs mean big money, Securities trading means big money, and the REFCO IPO has led to a $1 Billion legal malpractice case.  This story is all about big money.

"A court-appointed trustee responsible for retrieving funds for Refco Inc. creditors has sought more than $2 billion in damages from a prominent Chicago law firm, three accounting firms and several investment banks that played a role in Refco’s 2005 initial public offering.

The trustee, Marc S. Kirschner, filed a lawsuit Tuesday against law firm Mayer, Brown, Rowe & Mawe; accounting firms Grant Thornton, Ernst & Young and PricewaterhouseCoopers; and Credit Suisse Securities, Bank of America and Deutsche Bank Securities, the investment banks involved in the $583 million IPO.

The IPO, Kirschner said in an interview, was the "cashing-out portion" of a long-running fraud. It came after years of building an illusion that Refco was a successful brokerage, an effort begun by its former Chief Executive Phillip Bennett, but one that could not have been carried out without the help of outside professionals. "

Bennett has pleaded not guilty to fraud charges connected to $430 million worth of hidden bad debt.