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Madoff victims bring auditor to trial | Madoff victims bring auditor to trial |
(about 20 hours later) | |
The trial has begun between victims of Bernie Madoff's "Ponzi" scheme and Ernst & Young, the auditors they allege should have revealed the fraud. | The trial has begun between victims of Bernie Madoff's "Ponzi" scheme and Ernst & Young, the auditors they allege should have revealed the fraud. |
FutureSelect Portfolio Management, which lost $129m (£84m), is seeking to recoup £65m in a Seattle, Washington court. | FutureSelect Portfolio Management, which lost $129m (£84m), is seeking to recoup £65m in a Seattle, Washington court. |
It claimed Ernst & Young should have taken more steps to verify that Madoff's funds were real. | It claimed Ernst & Young should have taken more steps to verify that Madoff's funds were real. |
Ernst & Young said they are not responsible for the losses. | Ernst & Young said they are not responsible for the losses. |
Ernst & Young told the BBC that they were among several auditors used by funds that chose Madoff as their investment adviser, none of whom detected the fraud. | |
The trial comes nearly seven years after Madoff's scheme to defraud investors, which resulted in £11.4bn in losses, was revealed. Madoff was sentenced to 150 years in prison. | The trial comes nearly seven years after Madoff's scheme to defraud investors, which resulted in £11.4bn in losses, was revealed. Madoff was sentenced to 150 years in prison. |
FutureSelect's claims that as an auditor, Ernst & Young should have confirmed that the funds and returns were legitimate. | FutureSelect's claims that as an auditor, Ernst & Young should have confirmed that the funds and returns were legitimate. |
Steven Thomas, FutureSelect lawyer's told the Associated Press: "Because Ernst & Young said the numbers were good, FutureSelect invested." | Steven Thomas, FutureSelect lawyer's told the Associated Press: "Because Ernst & Young said the numbers were good, FutureSelect invested." |
In a statement to the BBC, Ernst & Young called the Madoff scheme a "sophisticated fraud" that went undetected even by government regulators. | In a statement to the BBC, Ernst & Young called the Madoff scheme a "sophisticated fraud" that went undetected even by government regulators. |
"While we regret the investors' losses, no audit of a Madoff-advised fund could have detected this Ponzi scheme," a spokesperson wrote. | "While we regret the investors' losses, no audit of a Madoff-advised fund could have detected this Ponzi scheme," a spokesperson wrote. |
FutureSelect invested money in a collection of funds managed by Tremont Partners, which in turn invested with Madoff. Ernst & Young was Tremont's auditing firm between 2000-2003. | FutureSelect invested money in a collection of funds managed by Tremont Partners, which in turn invested with Madoff. Ernst & Young was Tremont's auditing firm between 2000-2003. |
FutureSelect filed suits against Tremont, its parent company, and the other auditors. Those have all reached private out of court settlements. | FutureSelect filed suits against Tremont, its parent company, and the other auditors. Those have all reached private out of court settlements. |
A New York trustee has so far recovered or made agreements to recover £7.1bn of the lost principal amount. | A New York trustee has so far recovered or made agreements to recover £7.1bn of the lost principal amount. |
The trial is scheduled to last about one month. | The trial is scheduled to last about one month. |
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