Corporate Governance

The Madoff Saga Continues as Pomerantz Files the First Derivative Suit Against an Auditor

By Jim Hodgson

Britain?s Times Online has taken a keen interest in the Madoff scandal as numerous members of English society have emerged on lists of Madoff clients.  Members of Parliament have now joined ranks with the likes of the New York Mets, prominent banks, and various celebrities ? not to mention all of the charitable organizations that were wiped out by Madoff?s $50 billion Ponzi scheme.  This is truly a scandal that has gone global.

The names emerged in court documents as the Pomerantz firm filed the first Madoff-related derivative class action complaint against an auditor of one of the hedge funds that steered investor capital Madoff?s way.  The suit was brought by the Tomchin Family Charitable Trust, a $7 million California charity, which was invested in Tremont Group Holdings? Rye Select Broad Market XL Fund.  The suit alleges that the fund?s auditor, KPMG, missed numerous red flags that should have alerted the auditor to Madoff?s scheme.  From financial returns that were too good to be true, to the fact that Madoff?s multi-billion dollar operation was utilizing bookkeepers headquartered in an upstate strip mall, KPMG truly missed the elephant in the room.  Read more about our client?s suit against KPMG here.

Full post as published by PomTalk on February 11, 2009 (boomark / email).