Iowa pension fund sues audit firm over fraud loss

News

March 28th, 2012 by Ric Hanson

DES MOINES, Iowa (AP) – The Iowa Public Employees’ Retirement System has sued a New York-based auditing firm, alleging that the company failed to detect a theft scheme that cost the pension fund millions of dollars.  The Des Moines Register reports the federal lawsuit was filed in New York last week against Deloitte & Touche. The lawsuit says the auditing firm issued unqualified or “clean” audit reports that the fund relied on in purchasing fraudulent securities.

A Deloitte spokesman says the lawsuit has no merit and that its employees didn’t audit the financial statements of the entities at which the fraud allegedly occurred. The lawsuit follows the criminal case against two executives of Westridge Capital Management and a registered broker-dealer, WG Trading Co. 

One of the two awaits sentencing. The other awaits trial.