Ernst & Young LLP has been sued for $900 million by the liquidators of a fund that once funneled money to the now-imprisoned crook Bernard Madoff. The lawsuit, filed on behalf of M-Invest Ltd, accused Ernst & Young of negligence, professional malpractice and breach of contract over its audits for the Cayman Islands-based fund from 2003 to 2007. Union Bancaire Privee, a private Swiss bank, created the M-Invest “feeder fund” solely to invest client assets with Madoff’s firm, Bernard L. Madoff Investment Securities LLC.
The bank and M-Invest agreed last December to pay as much as $500 million to settle claims by Irving Picard, the trustee liquidating Madoff’s firm and seeking money for his victims, that they profited improperly from Madoff’s Ponzi scheme. The settlement was approved by the bankruptcy court in January. Ernst & Young claims that the lawsuit has no merit.
Eric Seiler, a lawyer who is with the firm of Friedman Kaplan Seiler & Adelman LLP, located in New York, represents the liquidators of M-Invest, who filed the suit in the New York State Supreme Court in Manhattan. Ernst & Young has also been sued by investors and the office of New York’s Attorney General over its work for the investment bank Lehman Brothers Holdings Inc., which went bankrupt three months before Madoff’s Dec. 2008 arrest.
Source: Insurance Journal
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