Merrimack College v. KPMG LLP

VERDICT

Trial
10/28/19 – 11/19/19

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Play button overlay 45f08f27c7337d189e8c31e635b5d0a0781b273131135cd77ee8b6f12366e7a2

Summary

Jury trial in accounting malpractice lawsuit.

Via the Boston Business Journal: "In a ruling with potentially broad implications for auditing firms, the Massachusetts Supreme Judicial Court has revived Merrimack College's lawsuit claiming that KPMG LLP failed to catch financial fraud committed by a former employee in its financial aid office.

On Thursday, the high court overturned a judge’s ruling last year in favor of the accounting giant. The case will now return to the lower court, where the judge will reassess whether it should move toward trial or whether KPMG should win on different grounds.

The groundbreaking decision will have repercussions for other auditing companies accused of malpractice by a business client.

The dispute centers on a former Merrimack financial aid director, Christine Mordach, who replaced grants and scholarships awarded to students with Perkins loans in a way that made the college’s budget appear to be more balanced than it really was. Mordach often did so without gaining students’ permission, saddling them with debt they did not even know they had, according to the SJC ruling. She was sentenced to a year in prison in 2015 and was ordered to pay back more than $1.5 million to Merrimack students."

https://www.bizjournals.com/boston/news/2018/10/01/sjc-revives-malpractice-suit-against-kpmg-in.html

Outcome

Verdict for Plaintiff - $150k award.

Jury found for Merrimac, damages awarded $100,000.00, found that KPMG was negligent (15%), that Merrimac was 85% comparatively negligent for 1999 to 2002. As to later years 2002 and later, Jury found damages were $50,000.00; that KPMG was 7.5% negligent, and that Christine Murdach was 92.5% responsible due to her fraud.

Sessions

NOV
7
PM Session
Verdict
3 Chapters
NOV
19

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