KPMG Settles AmGen Suit; Agrees to Pay $18 Million

Without admitting fault, KPMG LLP settled a suit connected to the collapse of General American Life Insurance Co., formerly Missouri's largest insurance company, the St. Louis Business Journal reported.

In a settlement approved Sept. 21 by Judge Thomas Brown of the Cole County (Missouri) Circuit Court, KPMG will pay $18 million to a General American liquidation fund, attorneys in the case told the Business Journal.


Click Here

The settlement also releases several KPMG partners who were named in the suit from further litigation. The suit was brought by Scott Lakin, director of the Missouri Department of Insurance, and Albert Riederer, special deputy liquidator for General American Mutual Holding Co., against KPMG and six of its partners in 2002, alleging they breached their professional obligations to General American, the Business Journal reported.

The suit claimed that more than $1 billion was lost, and the Business Journal reported that the General American liquidation fund has collected $47.5 million so far, most of which will eventually go to the 300,000 St. Louis-area policyholders. Liquidators have already distributed more than $1 billion of the $1.2 billion collected from the sale of General American to Metropolitan Life more than four years ago, the Business Journal reported.

Tom Fitzgerald, a KPMG spokesman, told the Business Journal that the firm decided to settle so it could focus on its audit business. "KPMG is confident that the audit services we provided to General American were consistent with professional standards and industry practices."

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

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.