Saturday, 1 October 2016
Last updated 17 hours ago
Aug 3 2010 | 3:45am ET
A Florida accounting firm has settled a lawsuit filed against it by two hedge funds that lost money in the Thomas Petters Ponzi scheme.
Kaufman Rossin & Co. agreed to pay $9.6 million to two hedge funds managed by Palm Beach Financial Partners. The bankruptcy trustee for the hedge funds claimed that the Miami accountants were negligent in failing to detect Petters’ Ponzi scheme, in a malpractice lawsuit filed last year. Palm Beach Financial invested $1.1 billion in Petters’ $3.65 billion fraud. Petters is currently serving a 50-year prison sentence after he was convicted last year.
Michael Budwick, a lawyer for the Palm Beach Financial trustee, said he plans to file “many more lawsuits” to recoup the money lost.
For its part, Kaufman Rosen’s insurance policy covers the settlement. The trustee originally sought $1 billion from the auditor.