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Pastimes : Investment Chat Board Lawsuits -- Ignore unavailable to you. Want to Upgrade?

To: Jeffrey S. Mitchell who wrote (7853)	4/8/2005 2:58:38 PM
From: scion	Respond to of 12465

Carnegie Intl. loses case against auditor Rachel Sams Staff A Baltimore City judge has ruled against Carnegie International Corp. in its $2 billion lawsuit against former auditor Grant Thornton LLP. Carnegie International, founded in 1994 in Hunt Valley as a telecommunications holding company, sued Grant Thornton for accounting fraud in 2000. The American Stock Exchange halted trading in Carnegie stock almost immediately after the company won a listing there, as the Securities and Exchange Commission raised questions about Carnegie's financial records. Carnegie said in its suit that Grant Thornton conducted an incompetent audit and then tried to cover up its mistakes by revising the company's financial statements. The suit took years to wind through the court system, and was placed on hold so that Carnegie's claims that Grant Thornton withheld evidence could be investigated. In 2003, a special master investigating the claims for the court found that Grant Thornton was negligent in not reporting some evidence, but denied Carnegie's request for a judgment against the auditor on that basis. Judge Kaye A. Allison ruled Wednesday that Grant Thornton was not negligent or fraudulent and Carnegie had not proved it suffered damages from Grant Thornton's actions. Carnegie deceived Grant Thornton about its finances, Allison wrote, and even if the company had proved damages against the auditor "equity would prevent this court from rewarding a wrongdoer." She ordered Carnegie to pay the suit's court costs. "We are gratified that the court ruled in our favor, and are glad to put this matter behind us," said Peggy Zagel, national managing principal of risk, regulatory and legal affairs at Grant Thornton, in a statement. "When Grant Thornton LLP uncovered massive fraud at Carnegie, we took action and brought this to the company but were fired and sued. We hope this situation is an example to others that the fear of legal action will not deter auditors from doing their jobs." William H. "Billy" Murphy Jr., the well-known Baltimore defense attorney who represented Carnegie, was traveling and unavailable for comment. bizjournals.com