RR Phantom
Location : Wasted Space Job/hobbies : Cayman Islands Actuary
| Subject: OZschwitz: KPMG pursued over collapse of failed property developer Westpoint Mon Oct 13, 2008 6:54 pm | |
| KPMG, the second-largest accounting firm in Australia, has been sued for negligence by the corporate watchdog for failing to raise the alarm about the finances at the failed property developer Westpoint.
The Australian Securities and Investments Commission argued that Westpoint was able to continue to raise money from unsuspecting investors because KPMG gave its accounts the green light.
Westpoint collapsed three years ago owing about 4000 investors more than $330 million.
Many will never recoup any of their investments but ASIC is seeking $200 million in damages to go towards repaying their losses.
It calculated the damages by estimating how much the eight Westpoint-related companies lost by trading while insolvent in the three years until June 2004 when KPMG was auditing their accounts. Westpoint sold high-interest, high-risk mezzanine finance products to unsophisticated and mostly elderly investors.
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