A federal appeals court has ruled that two prominent New York plaintiffs firms are not liable to former clients for failing to sue accounting firm Arthur Andersen in a securities fraud suit stemming from the largest Ponzi scheme in U.S. history.

Kirby, McInerney & Squire and Bernstein Litowitz Berger & Grossman were co-lead counsel in a 1997 class action against the Bennett Funding Group (BFG), a Syracuse, N.Y.-based outfit that sold investors $570 million worth of fraudulent securities. Arthur Andersen, which served as BFG’s auditor in 1989 and 1990, was not named as a defendant.

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