Accounting Firms

We have handled individual, multiparty, and class-action cases and license proceedings alleging accounting malpractice arising from auditing work, tax advice, and IT consulting. Many of these actions were shareholder class actions alleging securities fraud as well as common-law fraud, negligent misrepresentation, and breach of fiduciary duty, as well as tradition negligence claims. We have represented accounting firms and their partners and employees in litigation brought by corporations or bankruptcy trustees involving securities or common-law claims. Finally, we have represented accounting firms and their partners and employees in Section 2(e) proceedings at the SEC, involving their continued right to practice at the SEC, and in license suspension and revocation proceedings at State Boards of Accountancy.

Our tax attorneys form one of the nation's premier tax advisory practices, regularly appearing as special tax counsel in a wide variety of transactions and advising corporations on all aspects of tax management, including planning, IRS audits, administrative appeals, and litigation.

We also represent tax professionals who have been charged with misconduct by federal or state regulators or other licensing authorities. Our tax professionals have considerable experience in Treasury Circular 230. Our tax professionals routinely advise corporate tax departments on how to comply with these rules and how to avoid draconian penalties. We counsel corporate clients and their advisors on preserving privileges and assuring that the tax advice they give and receive and the tax reporting they provide offers the maximum protection from the assertion of penalties.

Representative Matters

We have handled the following:

• Class-action securities and professional malpractice litigation defending a national accounting firm in a class action securities and professional malpractice litigation arising from the bankruptcy of a major national homebuilder. Plaintiffs alleged errors in accounting for net realizable value write-offs and deferred tax asset estimates among other issues. Plaintiffs sought $95 million in actual damages and $1 billion in punitive damages. After a 66-day jury trial, the matter ended in a defense verdict. We also represented the firm and two of its partners in related State Board of Accountancy proceedings.
• Professional malpractice stockholder lawsuit defending a national accounting firm and two of its partners in a stockholder lawsuit arising out of the failure of a life insurance company and an associated insurance service agency, involving alleged failures in accounting for life insurance premiums and calculating required reserves.
• Professional malpractice action defending a national accounting firm and one of its partners in an action brought by foreign investors in British Virgin Islands corporations that owned US real estate, alleging breach of fiduciary duty, fraud, and racketeering arising from alleged improper disclosures regarding asset sales, erroneous financial statements, and erroneous tax planning and advice.
• Professional malpractice action filed by a bankruptcy trustee of a NASDAQ-listed national distributor of personal care products. Plaintiff sought over $100 million in damages, alleging the improper auditing and application of revenue recognition criteria and errors in the installation of a major ERP system impacting financial statements, customer relationship management, and supply chain management.