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SEC Charges Madoff Auditors With Securities Fraud, “Pretending” to Perform Audit
The SEC has charged the auditors of Bernard Madoff’s broker-dealer firm with committing securities fraud by falsely representing that they had conducted legitimate audits, when in fact they had not. The SEC announced today that it has filed a complaint in the SDNY alleging that from 1991 through 2008, certified public accountant David G. Friehling [...]
Liability for Accountants and Others in the Financial Crisis
On February 24, 2009, Stuart Grant of Grant & Eisenhofer P.A. and Michael Young of Willkie Farr & Gallagher LLP discussed the subject of the potential liability of professionals in the financial crisis with Securities Docket’s Bruce Carton. The discussion was part of a webcast in which Grant and Young collaborated on a presentation on [...]
PwC Under Fire in India for Audit Work on Satyam
Vadlamani Srinivas, Satyam’s former CFO, has now reportedly stated that he had been left out of conversations between the company and its auditor, PwC regarding nearly $1 billion in fixed deposits on Satyam’s books, which turned out not to exist. The statement was leaked to the press and reported yesterday by the Times Online. Srinivas [...]
Video: Fox Business Network Tracks Down Madoff Auditor
Fox Business Network tracks down David Friehling, the accountant at Friehling & Horowitz who is said to have audited Bernard Madoff’s business, in the video below. NY’s Rockland County District Attorney said last week that he had not been able to locate or speak with Friehling. Friehling and his son do not appear to be [...]
Further Details on Deloitte’s Lawsuit Against its Former Vice Chairman
Ryan Blitstein of the Huffington Post has an excellent article following up on the complaint filed by Deloitte against Thomas P. Flanagan, a 30-year partner and vice chairman with the firm, alleging insider trading (previously discussed on Securities Docket here and here). Among the interesting tidbits in Blitstein’s article are the following: Flanagan was a [...]
Deloitte Sues 30-Year Partner for Alleged Insider Trading
Deloitte has sued Thomas P. Flanagan, a 30-year partner in the firm, for allegedly trading on inside information he received from audits and lying about it for years. Courthouse News reports that Deloitte filed its case in Chancery Court in Delaware. According to the Courthouse News article, Flanagan “for 30 years was a partner” in [...]
U.S. Treasury Committee Cannot Reach Consensus, Offers No Recommendation on Limiting Auditor Liability
As I discuss in greater detail in this post on my Enforcement Action blog over at Compliance Week, on October 6 the U.S. Treasury Department’s Advisory Committee on the Auditing Profession issued its Final Report. Among many other things, the 200+ page report examined in great detail the “possible impact of the current U.S. liability [...]
Australia: ASIC Brings $200 Million Action Against KPMG Related to Westpoint Group
The Australian Securities and Investments Commission has sued KPMG for $200 million for alleged negligence in auditing collapsed Australian property empire Westpoint Group. The Age reports that the collapse of Westpoint in 2006 cost investors more than $300 million. ASIC brought the case under section 50 of the ASIC Act, which allows it to launch [...]