Wednesday, March 26, 2008

Lawyers circling overhead! – The next wave?

New Century Bankruptcy Examiner Says KPMG Aided Fraud

New Century Financial Corp.'s bankrupt estate might have cause to sue its former accountant KPMG LLP and some directors and officers for improper accounting leading up to its bankruptcy, a court examiner said in a report. New Century ``engaged in a number of significant improper and imprudent practices related to its loan originations, operations, accounting and financial reporting processes,'' Missal wrote in the report. He said ``KPMG contributed to certain of these accounting and financial reporting deficiencies by enabling them to persist'' and in some cases ``precipitating'' a departure from ``applicable accounting standards.'' ``This is really the embryo of the credit crisis,'' Missal said today in a phone interview.

Posted by tyrellcorporation @ 10:26 PM (591 views)
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2 thoughts on “Lawyers circling overhead! – The next wave?

  • The big four audit firms will have a lot to answer for,

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  • “…the estate may sue directors and officers to seek recovery of bonuses paid to them in 2005 and 2006 because those bonuses were tied to incorrect financial statements.” This should set a precedent for suing those who were paid bonuses for making reckless loans and bets which looked good in the short term but proved disastrous later on. NR could start the ball rolling by taking over Applegarth’s estate in Northumberland.

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