Judge Delays KPMG Investor Lawsuit Settlement

U.S. District Court Judge Dennis Cavanaugh has scheduled a hearing to review the investor settlement where KPMG and the law firm Sidley Austin Brown & Wood agreed to pay $225 million. The the accounting firm and the law firm initially agreed to pay $195 million plus $30 million for legal fees to settle an investor class action suit back on September 27. The law firm will pay 20 percent of the $195 million settlement or $39 million.


Click HereRegister today for the "Catapulting Finance to Boost Corporate Value" Webcast to be held on Thursday, October 13th, at 2 p.m. ET. Listen to a customer panel discuss how using Microsoft® FRx® and Microsoft Forecaster for their financial reporting, budgeting and planning have propelled their financial management and boosted their corporate value.

FRx Software Home Product Information
Training & Consulting Product Demo
FRx Express Customer Testimonial Video

The judge scheduled an October 28 hearing to resolve the questions of some of the individuals involved in the suit concerning the months-long negotiation process followed to reach the agreement. There were allegations of conflict of interest and breach of ethics on the part of Milberg Weiss who alledgedly colluded with KPMG to reach the settlement while representing investors in the class action suit according to the New York Times.

“Frankly, I am just not comfortable approving preliminarily the settlement at this time,” said Judge Cavanaugh after the September hearing. The judge added, “I just want to hear a little more.”

“He said he’s not judging whether he’s going to give preliminary approval or not at this point. He just wants to get some evidentiary testimony,” said Melvyn Weiss, partner in Milberg Weiss Bershad & Schulman in CNN Money. Weiss said in the New York Times, “We had always told our individual clients that they had to give individual consent or we would not file the class action” through which the settlement would be administered. Weiss said in Reuters, “The attack was on the process. So now we get an opportunity to put our witnesses on to show this was a perfectly proper negotiation.”

The settlement may be divided between up to 280 investors according to the New York Times. KPMG spokesman Tim Connolly speaking with Reuters said, “KPMG looks forward to resolving the civil litigation and with full and fair accountability,”

You may like these other stories...

Here's a CPA who truly walks the walk. On March 15, Frank Ryan, CPA, departed San Diego, California, with plans to be in Ocean City, Maryland, by July 2 to teach a course at the Maryland Association of CPAs’ (MACPA...
When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.  The "Big Eight" were still headquartered in Boston. Vietnam War...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Upcoming CPE Webinars

Jul 16
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
Jul 17
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.