Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, March 27, 2008

Bankruptcy Report on New Century Criticizes KPMG

A report by the bankruptcy court examiner into the collapse of New Century Financial, one of the largest subprime lenders before its bankruptcy, criticizes its auditor KPMG for enabling certain "significant improper and imprudent practices."  It also says that the auditor acquiesced to the client for fear of being replaced.  A spokesperson for KPMG stated it strongly disagreed with the findings.  NYTimes, Inquiry Assails Accounting Firm in Lender’s Fall; WSJ, KPMG Aided New Century Missteps, Report Says.

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