& Young ‘recklessly disregarded’ the true state of Lehman Brothers’
finances in a bid to secure its continued fees, claims a Californian county
suing the firm for its role in the biggest corporate bankruptcy in US history.
San Mateo County Investment Pool, a local government investment pool that
suffered a $150m loss when Lehman failed, has named the accountancy giant and
various Lehman executives in a lawsuit filed last week. ‘This case represents
the worst example of the fraud committed by modern day robber barons of Wall
Street, who targeted public entities to finance their risky practices,’ said the
Lead counsel for the plaintiff Joseph W Cotchett said he felt the plaintiff’s
chances of recovering some of their losses were ‘good’.
According to the lawsuit, E&Y ‘chose to look the other way and give its
stamp of approval to Lehman’s financial condition and risk exposure, rather than
risk losing lucrative accounting and auditing fees – estimated at $31m in 2007
alone’. It accuses the auditor of making ‘materially misleading’ statements and
says ‘E&Y knew or recklessly disregarded the true financial condition of
A US spokesperson for E&Y was dismissive of the case. ‘The complaint has
no merit. Lehman Brothers’ demise was triggered by dramatic and unprecedented
market events that continue to be felt throughout the world.’
The Financial Reporting Council has issued guidance regarding the annual reporting of 1,200 large and smaller listed companies. The letter highlighted the key issues and improvements that can be made in the 2016 reporting season
Baldwins Accountancy Group has continued investment in the north-east and appointed David Fish as a director in its corporate finance team
UK M&A activity bounced back strongly in July and August, according to analysis by the deals practice at PwC.
Smith & Williamson has added Jim Clark and Philip Marsden, of Marsden Clark Corporate Finance Limited, to its corporate finance team.