Thomas H. Lee Equity Fund V, L.P. v. Mayer Brown Rowe & Maw LLP

Refco, Inc. (defendant) hid massive customer-default losses through undisclosed "round-trip loans" routed through a subsidiary, and its outside counsel, Mayer Brown Rowe & Maw LLP (defendant), drafted documents, explained transaction details to third-party participants, and negotiated 17 of these loans. When private equity firm Thomas H. Lee Partners, L.P. (plaintiff) conducted due diligence to acquire an interest in Refco, Mayer Brown provided documents but deliberately concealed the round-trip loans; after THL acquired control, Refco's uncollectible debt became public and THL investors lost millions. THL sued Mayer Brown under section 10(b) and Rule 10b-5, RICO, common law fraud, and negligent misrepresentation, and Mayer Brown moved to dismiss all claims.