BDO Seidman, the US member of the BDO International network has been given a
fresh chance to defend
against negligence claims in a $521m (£347m) legal dispute.
Appeal judges decided that the original case in 2007 was flawed, ordering the
case to be retried.
BDO Seidman said today: “The Third District Court of Appeal of the state of
Florida has unanimously overturned a 2007 jury verdict against the firm and
ordered that the case be retried in the 11th Circuit Court.”
The Court of Appeal concluded that the trial court had prejudiced the case by
allowing evidenceto be presented in three phases.
This allowed the jury to find BDO “grossly negligent without, at the same
time, considering the conduct of other actors, including representatives of
Banco Espirito Santo,” BDO Seidman said.
Banco Espirito owned Bankest, the factoring company at the heart of the
BDO Seidman was fighting claims of gross negligence levelled by Banco
Espirito for its audit of Bankest.
The appeals court said “the evidence of reliance on BDO’s audit opinions was
insufficient to sustain the claims of the Bankest investors, save for the one
individual who testified at trial, and that the trial court improperly allowed
into evidence prejudicial hearsay testimony and documents which further served
to deprive BDO of a fair trial.”
The Appellate Court added, “We have carefully considered every substantive
and procedural authority that might be applied to preserve at least some of the
jury’s findings. In this case, no such balm is found.”
BDO Seidman chief executive Jack Weisbaum welcomed the appeals court
“We have consistently stated that we were confident that the jury’s erroneous
verdict in this case would be reversed on appeal.
“The addition of punitive damages at the time only served to emphasize the
injustice that took place at the trial court.”
Weisbaum vowed the retrial would give the firm the chance to show it acted
consistently at all times with its professional obligations and that its audit
opinions were based on the proper application of generally accepted auditing
Steven Thomas lead counsel for plaintiffs Banco Espirito Santo said:
“We are pleased that the effort and hard work the jury put into this case was
recognized by the appellate court, and we specifically note that the court did
not dispute BDO unethical conflicts of interest or its negligence.
“The evidence of BDO Seidman’s failures of even the most basic auditing
procedures is so overwhelming that we expect a new jury will reach the same
conclusion as the original jury.”
“We look forward to trying this case and reminding everyone of BDO Seidman’s
neglect of its public duty and the enormous conflict of interest they had.”
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