Suit Dismissed Against Independent Accounting Firm
An independent accounting firm faced a securities fraud lawsuit from the shareholders of a public company it had audited. The lawsuit claimed the accounting firm made false, fraudulent or misleading statements and failed to disclose adverse information about the public company it had audited.
Our attorneys successfully moved to get the lawsuit dismissed on the grounds that the plaintiffs had not met the standards for auditor fraud. We also pointed out that the plaintiff representative lacked standing to bring the action.
That success was followed by another when we opposed the plaintiff’s attempt to amend the complaint. The judge agreed with our attorneys that amending the complaint would make no difference, finding that the inference that the company concealed fraudulent activity from the auditor was more compelling than the inference that the auditor had knowledge of, but recklessly disregarded, the alleged fraud.
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