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Global accounting firm wins bank suit
By Curt Anderson |
June 20, 2009, Saturday
|
Print Edition
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A Miami jury decided on Thursday that global accounting network BDO International BV cannot be held liable for audits done by its United States member firm that caused US$170 million in losses at a Portuguese bank.
The six-person jury deliberated just over an hour before issuing the verdict in Banco Espirito Santo's lawsuit against Brussels-based BDO International.
The jury rejected the bank's argument that BDO International managed and controlled US member firm BDO Seidman and bears responsibility for the faulty audits. BDO International insisted its member firms are independent.
"BDO International BV is gratified to have this behind them," said BDO International attorney Mark F. Raymond after the verdict. "It has hung over their head for far too long."
A 2007 jury verdict still stands finding BDO Seidman liable for the US$170 million in bank losses plus US$351 million in punitive damages.
That verdict is on appeal, but now BDO International is off the hook.
Espirito Santo attorney Steven Thomas said the bank may also appeal Thursday's verdict. He said the evidence is solid illustrating that BDO International's grasp over members is strong.
The trial in 2007 resulted in a US$521 million negligence verdict against BDO Seidman, which claimed such a large damage award would bankrupt the company.
Earlier win
BDO International also won a key legal battle earlier this week when Miami-Dade Circuit Judge John Schlesinger ruled it could not be held liable for US$351 million in punitive damages as part of that earlier verdict, even if the jury had found it liable for the audits.
BDO International in 2008 reported combined fee income of US$5.1 billion from its member firms in 110 countries, which employ some 44,000 people.
The audits from 1998 through 2002 involved a now-defunct Miami firm, ES Bankest, which was financed by the Portuguese bank.
The company was in a business called "factoring," in which it purchased the accounts receivable of various companies for less than they are worth and then resold them at a higher amount. The factoring firm keeps the difference as profit.
The six-person jury deliberated just over an hour before issuing the verdict in Banco Espirito Santo's lawsuit against Brussels-based BDO International.
The jury rejected the bank's argument that BDO International managed and controlled US member firm BDO Seidman and bears responsibility for the faulty audits. BDO International insisted its member firms are independent.
"BDO International BV is gratified to have this behind them," said BDO International attorney Mark F. Raymond after the verdict. "It has hung over their head for far too long."
A 2007 jury verdict still stands finding BDO Seidman liable for the US$170 million in bank losses plus US$351 million in punitive damages.
That verdict is on appeal, but now BDO International is off the hook.
Espirito Santo attorney Steven Thomas said the bank may also appeal Thursday's verdict. He said the evidence is solid illustrating that BDO International's grasp over members is strong.
The trial in 2007 resulted in a US$521 million negligence verdict against BDO Seidman, which claimed such a large damage award would bankrupt the company.
Earlier win
BDO International also won a key legal battle earlier this week when Miami-Dade Circuit Judge John Schlesinger ruled it could not be held liable for US$351 million in punitive damages as part of that earlier verdict, even if the jury had found it liable for the audits.
BDO International in 2008 reported combined fee income of US$5.1 billion from its member firms in 110 countries, which employ some 44,000 people.
The audits from 1998 through 2002 involved a now-defunct Miami firm, ES Bankest, which was financed by the Portuguese bank.
The company was in a business called "factoring," in which it purchased the accounts receivable of various companies for less than they are worth and then resold them at a higher amount. The factoring firm keeps the difference as profit.
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