BDO US is being sued for $10.7bn by investors
claiming the firm ignored signs of potential fraud relating to the
Stanford Ponzi scheme.
The complaint was filed at the US Northern District of Texas
District Court, Dallas this week by three Texans who lost more than
$3.2m on certificates of deposit issued by Stanford’s Antiguan
bank.
The investors are seeking $10.7bn in damages
that represents the combined claims of all Stanford investors
worldwide who lost on the Antiguan certificates of deposit.
In a statement BDO said the firm had yet to be
served with the complaint and as such were unable to comment.
However, the firm
added: “BDO was never the auditor of Stanford
International Bank – the entity where this fraud took place. That
very important fact and the timing of this complaint – years after
the Stanford fraud came to light and after many other investor
complaints were filed – reflects a transparent understanding that
these allegations lack merit.”
Investors allege that BDO repeatedly issued
unqualified audit opinions on its Stanford client’s annual
financial statements as “Stanford’s companies needed unqualified
audit opinions to satisfy securities regulators and to continue
recommending sales of the allegedly bogus certificates of deposit
at Stanford International Bank in Antigua.”
The US Securities and Exchange Commission
previously charged Robert Stanford and his companies with
securities fraud in the Dallas federal court on 17 February
2009.
Stanford’s companies included Antiguan-based
Stanford International Bank, Houston-based broker-dealer and
investment adviser Stanford Group Company, and investment adviser
Stanford Capital Management.
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