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Dec 17

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Ernst & Young gets settlement deal of the decade

E&Y just settled the Lehman Brothers class action against them for $99 million. It made little news. The 2008 Lehman Brothers bankruptcy was at least partially caused by accounting malfeasance. This article describes the bankruptcy examiner’s report on this wrongdoing.

Arthur Andersen was entirely destroyed for a bad audit of Enron that was no worse than E&Y’s current situation. Yet, because everyone (including the Supreme Court of the U.S.) acknowledges that Andersen being forced out of business was improper, no one wants to do the same to E&Y. Still, the $99 million settlement is remarkable for how small it is relative to the damage that the improper accounting caused.

 

About the author

David Nolte

I am a founding principal of Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I am a Certified Public Accountant (CPA) and an Accredited Senior Appraiser (ASA), as well as having other professional credentials. I regularly serve as an expert witness involving damages measurement. My litigation-oriented resume is on Fulcrum's website.

Permanent link to this article: http://betweenthenumbers.net/2013/12/ernst-young-gets-settlement-deal-of-the-decade/

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