In an important decision for auditors, BDO International received a favorable jury verdict yesterday in Florida which clears it from responsibility for part of a $521.7 million verdict over negligent audits. The jury found that BDO International does not control U.S. member firm BDO Seidman LLP, which in August 2007 was required by another jury to pay $170 million in compensatory damages to Banco Espirito, Portugal’s third-largest bank, and $351.7 million in punitive damages. Bloomberg reports that lawyers for Banco Espirito argued BDO International should pay part of the verdict, setting up the current court battle.
After deliberating for about an hour on Thursday, the jury found that BDO International didn’t manage BDO Seidman and therefore couldn’t be held liable for its conduct. The verdict follows a separate ruling by state court Judge John Schlesinger on June 16 that Banco Espirito also failed to provide sufficient evidence showing they were entitled to ask for BDO International for punitive damages.
