BDO case sparks global network alert

Jeremy Newman, BDO Stoy Hayward

Jeremy Newman has said that BDO International’s fight to avoid liability in the Banco Espirito Santo case will be ‘significant’ for the entire profession.

The BDO network could face a bill in the case, likely to be substantial if upheld, after a US appeal court decided that a jury should decide if it should be made
jointly liable.

BDO Seidman is already facing a liability which it has claimed it cannot pay, of $521m (£258m), as a result of a finding of ‘negligence’ against one its audits.

Banco Espirito Santo attorney Steven Thomas said this week: ‘The victory means that ultimately BDO International, along with all the BDO member firms and offices worldwide, will be jointly liable for the $521m judgment against BDO Seidman.’

‘That’s a heck of a jump,’ said a BDO Seidman spokesperson. ‘The case is currently under appeal.’

Newman told Accountancy Age that he was confident that the decision to keep BDO
International out of the firing line would be upheld. ‘We’re entirely unconcerned,’ the BDO managing partner said.