It's more like a welterweight match but anyhoo...Opening statements were scheduled to be given in Banco Espirito v. BDO International in Miami today.
For those needing a refresher, BDO has been ordered to pay $521M to Banco Espirito after the Portuguese bank got duped out of $170M by the factoring (sketchy loans) company E.S. Bankest. New York Times coverage here and re: The Auditors here.
A jury found BDO guilty of negligence, and the firm was ordered to pay compensatory damages of $170M and $351M in punitive. The awards could potentially put BDO out on its ass.
The issue in this case is to decide if the "local" firm was acting as an agent of the international firm. If so found, the entire international network of BDO firms may be found liable for the judgment found against BDO.
Ouch.
This has big implications for all international firms, most currently for PwC who might find itself in a similar sitch with Satyam
Stay tuned.
Fla. jury to decide if BDO International liable [WEAR ABC 3]
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Tuesday, June 2, 2009
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