A $170-million malpractice suit against BDO Seidman has been sent back to square one, after a Miami judge declared a mistrial.
The lawsuit, brought by Portuguese bank Banco Espirito Santo, alleges that BDO failed to find key warning signs that financial services company E.S. Bankest was hiding fraudulent business practices.
The company declared bankruptcy in 2004 and Espirito is its largest creditor. BDO has denied all of the allegations, saying that the fault lies with the officers and managers of the bank -- several of whom, including Bankest directors Eduardo and Hector Orlansky, have already been convicted on criminal fraud charges.
According to the Miami Herald, the state judge overseeing the malpractice case had issued an order before the trial began barring any reference to the suicide of a BDO executive. After an attorney for the bank mentioned the suicide while questioning a witness, lawyers for BDO argued that the jury would unfairly associate the suicide with the uncovering of fraud at Bankest -- though a direct connection was not implied during the questioning.
Testimony in the trial had started in late January. A meeting was set for this week to plan a new trial.
