BearingPoint Restates Earnings, Faces Legal Action

At least six lawsuits have been filed against BearingPoint, the former consulting arm of Big Four firm KPMG, after the firm recently restated earnings.

BearingPoint lowered its earnings by $10.8 million for the first three quarters of fiscal year 2003 in a Form 8-K filed with the Securities and Exchange Commission last month. In the report, filed August 14, the consulting company stated that it undervalued intangible assets and reduced income to account for additional amortization expense and related accounting adjustments.

The various lawsuits are class action suits that claim that BearingPoint intentionally misrepresented revenues and misled shareholders with their earlier filing. The price of a share of BearingPoint stock dropped 23%, from $10.31 on August 13 to $7.90 on August 14 after the release of the report.

Anyone who owned BearingPoint stock between October 30, 2002 and August 13, 2003 and who sustained damages, is entitled to be included in the lawsuits. Analysts anticipate that several thousand plaintiffs may participate in the legal action. A lead plaintiff and lead counsel have yet to be named.

The lawsuits allege that BearingPoint violated Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 by issuing statements to the market containing material misrepresentations.

BearingPoint spokeseman John LaPlace said, "We believe the suits have no merit and will vigorously defend against them."

Philadelphia-based Berger & Montague, P.C., Bala Cynwyd, PA-based Schiffrin & Barroway, LLP, Baltimore-based Charles J. Piven, P.A., and Philadelphia-based Brian M. Felgoise, P.C. are among the firms bringing legal action. BearingPoint shareholders wishing to participate in a lawsuit should contact one of these firms.

You may like these other stories...

A proposal issued by the Governmental Accounting Standards Board (GASB) last week explains how fair value measurement should be defined for state and local government financial reporting.The exposure draft, Fair Value...
By Jason Bramwell The board of trustees of the Financial Accounting Foundation (FAF) finalized a new policy on November 19 that provides the Governmental Accounting Standards Board (GASB) with direction on what...
By Jason Bramwell The Governmental Accounting Standards Board (GASB) is now offering a free online toolkit designed to assist preparers and auditors of state and local government pension plans with implementing new...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.