Accounting firm KPMG is being sued for $1bn (£690m) in damages by the trustee of a collapsed US sub-prime lender, New Century Financial – the first major case against an auditor during the financial crisis.
Alan M Jacobs accuses KPMG of conducting "reckless and grossly negligent audits" that failed to show the lender's financial problems. The world's third-largest auditing firm has denied any wrongdoing.
The lawsuits allege that KPMG LLP assisted in and certified "materially misstated financial statements," and that KPMG's international parent failed in its watchdog role and is responsible for "the severely reckless and grossly negligent acts of its agent".
