Shareholder Charge of Shoddy BDO Audit of AmTrust Revived (1)

BDO USA P.C. acted recklessly in its audit of insurer AmTrust Financial Services Inc. and must face a shareholder class action over the company’s accounting errors, a panel of Second Circuit judges said Thursday.

The Manhattan-based appeals panel revised its 2023 decision that had dismissed the investor challenge against the auditor. In their amended ruling, judges for the US Court of Appeals for the Second Circuit deemed that BDO issued a “false certification” that its work for AmTrust met basic US audit standards. The judges also found that “misstatements” in the firm’s audit opinion were significant, or material, to investors. ...