In Grant Thornton LLP v. Prospect High Income Fund, 314 S.W.3d 913 (Tex. 2010), the court ruled that plaintiffs, bond and hedge funds, who had a sophisticated bond investor with a bachelor's degree in finance and master's degree in business administration on staff, could not have relied on representations about a company's source of credit funding contained in audit reports when the investor learned that the company's ability to access credit had been lost and the audit reports were inaccurate. Grant Thornton, 314 S.W.3d at 915-16, 923-24. Where the funds continued to purchase bonds knowing that the company lacked its primary source of credit, there could be no reliance. Id. at 923-24. The Court concluded that investors did not justifiably rely on an accountant's audit report when buying additional bonds where the investors' own sophisticated senior portfolio manager knew the company issuing the bonds had lost its primary source of funding. Grant Thornton LLP, 314 S.W.3d at 923-24. The court stated that "both fraud and negligent misrepresentation require that the plaintiff show actual and justifiable reliance," and explained, "in measuring justifiability, we must inquire whether, given a fraud plaintiff's individual characteristics, abilities, and appreciation of facts and circumstances at or before the time of the alleged fraud, it is extremely unlikely that there is actual reliance on the plaintiff's part." Id. The court continued, "moreover, a person may not justifiably rely on a representation if there are 'red flags' indicating such reliance is unwarranted." Id. The court rendered judgment for the accountant, concluding there was no evidence of justifiable reliance by the investors on the accountant's statement that the issuer was in compliance with certain escrow requirements. Id. at 931.