NY Court Declines To Bump Up Auditors' Fraud Liability

Law360, New York (October 25, 2010, 11:12 AM EDT) -- New York's highest court has ruled against expanding third-party liability in cases in which a corporation's management engaged in financial fraud that was either assisted or missed by outside advisers, shutting down arguments brought by creditors of the now-defunct commodities trading firm Refco Inc. and shareholders of American International Group Inc.

Judge Susan P. Read wrote the majority opinion for the New York State Court of Appeals on Thursday, explaining the court would not alter its precedent related to in pari delicto, imputation and the adverse...
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