According to an expert on shareholder activism, many angry investors are looking into taking legal action against mutual funds holding Refco. Lawsuits have already been filled against Grant Thornton, Refco's auditor, as well as investment banks who disregarded the initial public offering by the futures broker a few months ago, and now more lawsuits are a possibility, MarketWatch reports.

"As we move down the food chain, I'm sure some investors will start looking sideways at their investment managers and the mutual funds in which they invest, so it's inevitable that some suits will be brought," said Patrick McGurn, senior vice president and special counsel at Institutional Shareholder Services.

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