Auditors Can't Exit Suit Over Funds' Ponzi Investments

Law360, New York (June 16, 2011, 3:53 PM EDT) -- A California federal judge on Thursday declined to dismiss three accounting firms from a proposed class action targeting hedge funds that invested customer funds in Ponzi schemes run by Thomas J. Petters and Bernard L. Madoff.

U.S. District Judge William Alsup ruled the plaintiffs had sufficiently alleged that Rothstein Kass & Co. PC and McGladrey & Pullen LLP should have known the hedge funds, including Sky Bell Asset Management LLC, Pipeline Investors LLC and Wailea Partners LP, were recklessly investing customer money and that the issues...
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