March 3, 2007
2d Circuit Opinion on Accountant's Liability
The Second Circuit held, in Overton v. Todman & Co., 2007 WL 574623 (2d Cir. 2/26/2007), that an accountant has a "duty to correct" and can be held primarily liable for securities fraud when it provides a certified opinion containing false and misleading statements, subsequently learns (or is reckless in not learning) that the statements were false and misleading, knows (or should know) that investors are relying on that opinion, and fails to take reasonable steps to correct or withdraw its opinion.
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