BDO Seidman has been caught up in the Bernard Madoff scandal, heaping more misery on the firm which is already fighting a $521m negligence dispute.
The New York Law School is suing BDO Seidman for its audits of Ascot Partners, a fund that invested heavily with Madoff's securities firm.
BDO Seidman has denied any wrongdoing in the case. 'It is understandable that investors affected by the massive fraud at Bernard L Madoff Investment Securities are frustrated and angry,' WebCPA reported.
'However, it is unfortunate that these investors would bring legal action before all of the facts are known and seek to blame others for their own investment decisions.
'BDO Seidman is not and has never been the auditor of Madoff Securities. BDO Seidman's audits of Ascot Partners conformed to all professional standards and we will vigorously defend ourselves against these unfounded allegations.'
Other accounting firms may find themselves the target of investor lawsuits in the case. Fairfield Greenwich Group, whose hedge fund invested $7.5bn in Madoff's firm, is considering suing its own auditors, PricewaterhouseCoopers, for failing to detect the fraud, according to press reports.
I know that it is a common belief that in the US people sue at the drop of a hat, but this seems to be ridiculous.
How can you sue your own auditors for your investments?
On this basis, this would make auditors liable for every investment one of its audit clients made?
Unless i've misunderstood this, it seems laughable.
Posted by: Anon, 19 Dec 2008 | 00:00
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