Great accounting malpractice post on attorney Chris Trebatoski’s legal and accounting website. See it here.
Learn about what one federal judge called an accountant’s worst nightmare; finding out the company you had audited for two years had disappeared two years earlier and was a “mirage” and a total fraud. Think it is an easy case for the victims? Nope! The accounting firms won.
Chris does a great job telling the story about a Chinese coal mining company that duped investors for two years and apparently their accountants, Moore Stephens too.
The accountants escaped liability for accounting malpractice for a number of technical reasons including some questionable lawyering by the investors. Ultimately, the court suggested the reliance on the wrong expert witness and the way the case was brought may have killed any chances the investors had to sue the accountants. (In fairness to the lawyers who brought the case, the proofs needed in this case were more stringent than the run-of-the-mill accounting malpractice case.)
There are not many accounting malpractice stories on the web. Few cases are reported. Often these cases are settled and subject to nondisclosure agreements meaning the story is never told. Chris, however, handled one of the biggest financial malpractice case in Wisconsin, one which brought in $45 million for he Milwaukee County public employees pension fund. Our firm is presently handling one of the largest accounting malpractice cases in Michigan, a whopping $50+ million claim against Plante Moran.