BDO Off The Hook: Appeals Court Throws Out $521 Million Verdict

A Florida appellate court overturned a $521 million jury verdict against Chicago-based BDO Seidman LLP (FY09 $620 million) in a case where the Portuguese financial firm Banco Espirito Santo accused BDO of failing to unearth a fraud that led to the collapse of a Florida financial services company.

The Third District Court of Appeal of the State of Florida unanimously overturned the 2007 jury verdict against the firm and ordered that the case be retried in the 1st Circuit Court, finding the firm was placed in an unfair position to defend itself in an unusual three-phase trial.

BDO Seidman CEO Jack Weisbaum welcomed the appeals court decision. “We have consistently stated that we were confident that the jury’s erroneous verdict in this case would be reversed on appeal. The addition of punitive damages at the time only served to emphasize the injustice that took place at the trial court.”

Weisbaum vowed the retrial would give BDO Seidman the chance to show it acted consistently at all times with its professional obligations and that its audit opinions were based on the proper application of generally accepted auditing standards.

Banco Espirito Santo, lead counsel, Steven Thomas said, “We are pleased that the effort and hard work the jury put into this case was recognized by the appellate court, and we specifically note that the court did not dispute BDO unethical conflicts of interest or its negligence.”