The question seems pretty simple: If executives at a public company commit fraud that later comes back to cost the company, can its shareholders go after the company’s auditors for missing the fraud in the first place?

Stuart Grant, a plaintiffs lawyer and name partner of Grant & Eisenhofer, says the answer has too often been no, with courts denying shareholders the right to pursue malpractice claims against auditors in public fraud cases. Grant will have a chance to make a dent in that precedent today in New York’s Court of Appeals, where he will ask for permission to sue the accounting firm PricewaterhouseCoopers on behalf of various institutional shareholders of AIG, according to Grant and court records. Courts in Delaware have so far denied shareholders’ request to sue PwC, but the accounting firm, which has used Cravath, Swaine & Moore throughout the case, isn’t taking any chances. It has retained King & Spalding’s Paul Clement, a former U.S. solicitor general, to argue the case today at New York’s highest state court.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]