KMPG Agrees to Pay $115M to Settle Lernout Lawsuit
Accounting firms KPMG Bedrijfsrevisoren of Belgium and KPMG LLP of the United States (together the "KPMG Defendants") have agreed to pay a total of $115 million to settle a shareholder lawsuit stemming from the collapse of Lernout & Hauspie Speech Products, N.V., a Belgian software company.
The payment by the KPMG Defendants represents one of the largest combined recoveries from accounting firms in a securities class action, according to Berman DeValerio Pease Tabacco Burt & Pucillo, one of three law firms representing co-lead plaintiffs in the case.
Investors who purchased Lernout & Hauspie common stock on the Nasdaq Stock Market, purchased Lernout & Hauspie call options, or sold Lernout & Hauspie put options on any U.S.-based options exchange from April 28, 1998, through and including November 9, 2000 (the Class Period), are eligible to file claims to share in the settlement proceeds. The settlement requires court approval before becoming final.
"Lernout & Hauspie used almost every accounting trick in the book to scam investors, which led to the company's demise," said Berman DeValerio partner Jeffrey C. Block. "The recovery is a win for investors, particularly considering the company went bankrupt."
The lawsuit, pending in U.S. District Court for the District of Massachusetts, claimed that Lernout & Hauspie and its top executives used deceptive accounting practices to artificially inflate the company's reported revenues by an astounding 64 percent - or a total of $377 million - over a two-and-a-half-year period.
The settlement ends litigation against the KPMG Defendants. The case is continuing against other defendants, including Lernout & Hauspie's former top officers, who are currently facing criminal charges in Belgium. For more information about this case, visit www.bermanesq.com.
Berman DeValerio is co-lead counsel in the case, along with the law firms of Shalov Stone & Bonner LLP and Cauley Bowman Carney & Williams, PLLC. The firms represent a group of individual investors as lead plaintiffs.
Source, Business Wire
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.