In a three-year-old legal fray that resulted in a mistrial in March, a jury here has found global audit firm BDO Seidman guilty for its failure to detect audit fraud that prompted a Florida financial services company to declare bankruptcy. The verdict stems from a suit filed in 2004 by Banco Espirito Santo SA, a Portuguese bank that charged BDO with failing to uncover some $170 million of fraud at financial services firm E.S. Bankest, a former partner of the bank.
Several former Bankest executives have subsequently been sent to prison following their convictions on criminal charges related to the fraud.
The ruling under Florida law could expose BDO to triple the amount of investor losses or $510 million.
The jury will decide how much Espirito Santo gets in the second phase of the trial, which starts next week. BDO said it would appeal.
