ABFS Bondholders Get Green Light For BDO Suit

Law360, New York (August 13, 2008, 12:00 AM EDT) -- Bondholders left holding paper after the collapse of American Business Financial Services will be allowed to sue accounting firm BDO Seidman LLP, a federal judge ruled Monday.

Judge Thomas O'Neill Jr. of the U.S. District Court for the Eastern District of Pennsylvania ruled that the bondholders had presented enough circumstantial evidence that the auditor had made serious auditing violations and ignored “red flags” in ABFS financial statements, which were then put into bond prospectuses, for a lawsuit to proceed.

“At this stage of the litigation I...
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