SEC Sues KPMG Execs Over Bungled TierOne Audits

Law360, New York (January 9, 2013, 1:30 PM EST) -- The U.S. Securities and Exchange Commission on Wednesday launched an administrative proceeding alleging two KPMG LLP auditors ignored red flags in TierOne Bank's mortgage holdings before the Nebraska company tumbled into bankruptcy.

KPMG partner John J. Aesoph and senior manager Darren M. Bennett in 2008 wrongly signed off on TierOne’s rosy estimates for the fair value of the collateral underlying its troubled loans, the SEC says. In April 2010, KPMG resigned as TierOne’s auditor and withdrew its audit opinion, admitting it had been “materially misstated.” Two...
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