Deloitte Signed Off On Bogus ChinaCast Docs, Funds Say

Law360, New York (February 19, 2013, 6:54 PM EST) -- A group of investment funds hit Deloitte & Touche LLP with a securities suit in New York federal court Friday to recover tens of millions of dollars in alleged investment losses on ChinaCast Education Corp. securities, saying the audit giant signed off on the company’s bogus financial statements.

The investor-plaintiffs claim Deloitte ignored hundreds of transactions related to millions of dollars in loans the company received from unlisted parties, meaning that much of the company’s cash on hand was actually destined for third-party lenders.

“In violation...
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