7th Circ. Revives Lancelot Trustee's Auditor Malpractice Suit

Law360, New York (April 3, 2012, 5:36 PM EDT) -- The Seventh Circuit on Tuesday vacated a lower court's judgment that the Chapter 7 trustee of Lancelot Investors Fund LP cannot hold auditor McGladrey & Pullen LLP responsible for failing to detect criminal fraud, ruling that the court should have determined when the funds' manager knew of the fraud.

A three-judge panel said that the Illinois district court had erred in applying the doctrine of in pari delicto, which says that a lawsuit is invalid if a plaintiff is just as guilty as the defendant, without...
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