Hedge Fund Auditor Settles Petters Case

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.


In Depth

Q&A: Rotation Capital's Rothfleisch On SPAC 2.0

Aug 11 2017 | 7:43pm ET

Corporate actions have long been a staple of event-driven investors, but activity...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Star Mountain: Private Lending in the Lower Middle-Market

Aug 14 2017 | 4:45pm ET

Private credit has become one of the most popular alternative asset classes in recent...

 

From the current issue of