E&Y off hook in blame game test case
US test case win for E&Y lets accountants and administrators off the hook in credit crunch blame game
A US judge has ruled Ernst & Young (E&Y) are not liable for the
collapse of the Beacon Hill Master Hedge fund after liquidators sued the firm
for performing a deficient audit, where the value of the hedge fund was said to
Beacon Hill, which lost $US300m (?154m) in 2002, was charged with inflating
its mortgage-backed securities and its managers, denying the wrongdoing, settled
the case in 2004 for $4.4m.
According to Euromoney, the case may set a precedent for handling
accusations of blame which could occur as more hedge funds are forced into
liquidation because of the credit crunch.
However, this will depend on the outcome of an appeal against the court
judgment which has just been lodged.