Feeds

KPMG settles with L&H investors

Stumps up $115m

  • alert
  • submit to reddit

Beginner's guide to SSL certificates

KPMG has agreed to pay $115m to settle lawsuits brought against it by investors in the now-bankrupt software firm Lernout & Hauspie.

The lawsuit claimed that Lernout & Hauspie and its top executives used deceptive accounting practices to artificially inflate the company's reported revenues by 64 per cent over a two-and-a-half-year period. The company filed for bankruptcy in 2000, in the middle of the scandal.

The company was a client of KPMG in Belgium, which in turn passed work along to the US operation.

Anyone who bought stock in the firm between 28 April, 1998, and 9 November 2000 is eligible for compensation. However, because of the sheer scale of the collapse, investors will likely get back mere pennies on each dollar invested.

Jeffrey Block, a partner at Berman DeValerio, one of three law firms acting for the investors, said: "Lernout & Hauspie used almost every accounting trick in the book to scam investors, which led to the company's demise."

He added that the recovery, which, if approved, will be the third largest of its kind, is a "win for investors, particularly considering the company went bankrupt".

Although the settlement marks the end of the case against KPMG, it is still pending against others, including former Lernout & Hauspie top executives. These same executives are currently facing criminal charges in Belgium.

The accounting firm's US and Belgian operations have not admitted any wrongdoing, maintaining that they were the victims of a "massive, complex, and cleverly conceived fraud at Lernout & Hauspie".

KMPG said the decision to settle was a practical business decision and "saves the firms from protracted legal battles beyond the four years already spent on this matter". ®

Related stories

Meet the guinea pig man of Flanders
SEC takes belated fraud action against L&H
L&H struck dumb
L&H told where to stick its bankruptcy protection request
L&H subpoenaed by SEC
L&H returns fire as the class actions roll in

Beginner's guide to SSL certificates

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
DOUBLE BONK: Testy fanbois catch Apple Pay picking pockets
Users wail as tapcash transactions are duplicated
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
In the next four weeks, 100 people will decide the future of the web
While America tucks into Thanksgiving turkey, the world will be taking over the net
Microsoft EU warns: If you have ties to the US, Feds can get your data
European corps can't afford to get complacent while American Big Biz battles Uncle Sam
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.