A China unit of the accounting firm Deloitte Touche has won the dismissal of a securities fraud claim over its audit of Longtop Financial Technologies Ltd, which has been accused by federal regulators of failing to file accurate financial statements.
In an opinion issued in federal court in Manhattan on Monday, U.S. District Judge Shira Scheindlin dismissed a claim against Deloitte Touche Tohmatsu CPA Ltd (DTTC) brought by investors in Longtop, who alleged that the accounting unit issued audit opinions giving Longtop a clean bill of health even though it was aware of potential red flags….
Specifically, she found that the investors had not sufficiently shown that the Deloitte unit had any motive to commit fraud or that it made any material misstatements in its audit opinions of Longtop.
‘Enforcement 40’ for 2020
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