September 28, 2020

Memo to Audit Firms: If Steven Thomas Sues You, That Means You Really Screwed Up

If you've been reading Going Concern for a while, you have probably heard the name Steven Thomas. If you're unfamiliar, he's a partner at the law firm of Thomas, Alexander & Forrester in Vencie, California and he's done quite all right for himself by suing auditors. Big auditors. He served as lead counsel for the plaintiffs in the confidential settlements between the New Century Liquidating Trustee and KPMG as well as E.S. Bankest and BDO among others. Thomas is keeping quite busy, as Reuters' Alison Frankel reported late last week that he's currently litigating cases against Deloitte, Ernst & Young, KPMG, and McGladrey.

If that seems like a lot of work, well, yes, it probably but it's not like Thomas is chasing down every auditor siren that goes off. For your audit firm to have the pleasure of being sued by Thomas, you've got to be special. Really special:

Before we bring a case, in every instance, we're not looking for some small mistake. The cases we bring, there's been clear, if not gross, negligence or fraud involved.

How to sue auditing firms – and win! Questions for Steven Thomas [Alison Frankel/Reuters]

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