New Century Trustee Seeks $1B From KPMG

Law360, New York (April 1, 2009, 12:00 AM EDT) -- The liquidating trustee of New Century Financial Corp. is suing KPMG LLP to recover at least $1 billion for creditors, claiming the auditor’s negligence is largely responsible for the subprime mortgage lender’s disastrous failure.

New Century’s liquidating trustee and plan administrator, Alan M. Jacobs, fired off two actions Wednesday, lacerating KPMG International and its U.S. arm KPMG LLP for assisting the mortgage lender’s false accounting practices, facilitating both its extraordinary growth and sudden implosion.

Rather than provide an independent audit of New Century, once the second-biggest...
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