Accountants Team

Mayer Brown has developed a global team of accounting law professionals to meet our accounting clients’ international practice needs across the Americas, Asia, and Europe. Through our offices worldwide, we have the resources necessary to respond quickly to any issue faced by leading accounting firms, contentious or otherwise.

We have gained a thorough understanding of the structures, cultures and operating practices of accounting networks and individual firms from our longstanding relationships as well as from the experience of several of our lawyers working within accounting firm general counsels’ offices. This understanding enables us to provide legal advice that takes into consideration the business, regulatory and other realities applicable to the accounting industry, and has resulted in our being called upon to support accounting networks’ wider global needs.

In addition to our extensive experience representing US member firms in US proceedings and UK member firms in UK proceedings, we have provided strategic oversight of the handling of claims worldwide, including claims against member firms in Hong Kong, Singapore, Bangkok, the Cayman Islands, Korea and India. In some instances we have worked with our existing local teams as well as local teams from other law firms.

Mayer Brown’s US lawyers have extensive experience representing leading accounting firms and individual auditors in litigation and regulatory matters. Our group also regularly advises on risk management and firm policy matters and has extensive experience applying and interpreting the relevant professional standards, including GAAP, GAAS, PCAOB Auditing Standards and Rules, and SEC regulations and interpretations.

Our London Insurance and Reinsurance group is regularly instructed to defend firms of accountants insured through the London insurance market. We have strong relationships with not just the accountancy practices, but also their insurers and brokers having specialised in this field for over two decades. We are experienced in dealing with tax and insolvency matters, regulatory investigations, complex causation issues and all problems that can impact on an accountancy practice. Our London office is highly rated in the legal directories for its expertise in this area. 

Consultants Team

Prominent consulting firms regularly turn to Mayer Brown for assistance when confronting significant legal matters, including professional negligence suits, trade secret disputes, employment lawsuits and claims arising under federal and state securities laws. Whether the adverse party is a government agency, a competitor or a client, we have the experience and the resources necessary to handle the matter. Our global team of lawyers enables us to meet the legal needs of international consulting firms, wherever they may arise. 

Lawyers Team

Law firms are not immune from litigation initiated by dissatisfied clients, disgruntled former employees, regulatory agencies and state and federal prosecutors. We recognize that any claim against a law firm, regardless of its merit, has the potential to cause embarrassment and injury to the firm’s carefully cultivated reputation. Major law firms consistently rely upon our team for counseling and representation in connection with a broad array of significant matters including the evaluation of potential malpractice exposure in connection with specific client engagements, resolution of client conflicts and other ethics issues, and resolution of partnership and employment disputes.

In addition, we have been retained by law firms and lawyers to handle the following types of litigation matters:

• Defense of legal malpractice claims brought by clients, investors and other parties who contend that the law firm owed them a duty of care.
• SEC inquiries and state and federal grand jury investigations.
• Deposition, grand jury or trial testimony in matters involving current or former clients of the law firm.
• State and local bar disciplinary committees.
• Defense of wrongful termination, breach of fiduciary duty and other employment suits.
• Expert testimony concerning the standard of care for the provision of particular types of legal services.

The breadth of our practice enables us to employ a collaborative approach in our defense of legal malpractice claims. Typically, the team assembled to handle a case will include experienced malpractice lawyers with knowledge of the practice area implicated by the claim, a member of our electronic discovery team to facilitate the efficient gathering and production of documents, and an appellate lawyer to ensure that errors by the trial court are preserved for appeal. We understand that law firms are among the most sophisticated consumers of legal services, and we welcome the collaboration of our law firm clients in the development and implementation of successful defense strategies.

Licensing, Naming and Other Risk Management Issues 

Mayer Brown regularly consults with professional services firms on risk management and regulatory compliance matters. The members of our professional liability practice have significant experience in developing and implementing records retention policies and procedures for various business lines as well as risk and administrative functions. We also collaborate with our Electronic Discovery and Records Management team to deliver best practices and other cost effective measures to support efficient data collection policies. Furthermore, our team is familiar with state and federal rules and regulations related to advertising and marketing and regularly advises professional services firms on compliance with these rules.

Accounting Matters

• Representing Moore Stephens in the SDNY and the Second Circuit against Section 10(b) and Section 11 claims. Plaintiffs claimed that Moore Stephens should have uncovered fraud at Puda Coal, a US holding company, involving the transfer of its operating subsidiary to a company executive. On summary judgment, SDNY’s Judge Forrest excluded Plaintiffs’ expert witness as unqualified to testify on the relevant PCAOB standards, while refusing to exclude Moore Stephens’ PCAOB expert. Accordingly, the district court ruled that there was no material issue of fact on Section 10(b) scienter and that there was no evidence of and no triable issue on Section 11 subjective falsity. All other defendants settled following Moore Stephens’ dismissal. On appeal, the Second Circuit affirmed the prior rulings striking the plaintiffs’ expert and granting summary judgment on Sections 10(b) and 11 claims, holding that plaintiffs failed to put forth an expert on the standard of care and failed to show audit failures. Critically for accountants, the Second Circuit held that audit reports involve significant subjective judgment and are statements of opinion subject to the US Supreme Court’s ruling in Omnicare.
• Representing Crowe in two actions filed by the trustee of Colonial BancGroup, Inc. and the FDIC as receiver for Colonial Bank in the Middle District of Alabama. The actions allege that Crowe breached its contract and/or was negligent in providing outsourced internal audit services to Colonial. This litigation represents the first public instance of the FDIC pursuing suit against an accounting firm that had provided outsourced internal audit services. Plaintiffs claim damages in excess of $2 billion.
• Represented Ernst & Young in a purported securities class action under Section 11 of the Securities Act of 1933 brought by debt and equity holders of Overseas Shipholding Group. We obtained early summary judgment for our client after Overseas Shipholding Group filed for bankruptcy after disclosing that it owed nearly $500 million in tax liability under Section 956 of the Internal Revenue Code. Judge Scheindlin, of the SDNY, entered judgment after concluding that the alleged corrective disclosure did not disclose any information about Ernst & Young and that the case could not be saved by relying upon a materialization of a risk theory. All of the other defendants settled the case following Ernst & Young’s dismissal.
• Represented Ernst & Young in the Regions Financial Corporation litigation filed by securities purchasers in the SDNY. The action alleged that Ernst & Young consented to the incorporation into a registration statement and prospectus of its audit report on the company’s materially misstated financial statements, thus violating Section 11 of the Securities Act. We obtained dismissal of the Section 11 claim. We successfully represented Ernst & Young before the Second Circuit on plaintiffs’ appeal and obtained an important ruling establishing the requirement that plaintiffs plead subjective falsity as to statements of opinion in Section 11 securities claims. We recently secured confirmation of this ruling in the Puda Coal litigation.
• Represented Deloitte & Touche LLP in Florida state court against common law fraud and negligence claims related to the audits of Grand Court Lifestyles, a publicly traded senior living company. We obtained partial summary judgment in Deloitte’s favor on claims filed by a committee of unsecured creditors, and thereafter negotiated a favorable settlement.
• Represented Ernst & Young in all matters relating to the firm's audits of Superior Bank. Prior to its failure in 2001, Superior was a major sub prime lending institution. In November 2002, the FDIC, acting in its corporate capacity, filed a $2 billion lawsuit against Ernst & Young. We successfully moved to dismiss the FDIC's claim for lack of standing and successfully defended the district court's decision on appeal to the Seventh Circuit.
• Represented PricewaterhouseCoopers International in the securities class action pending in federal court in New York relating to the confession of the Chairman of Satyam Computer Services Ltd. that he had falsified Satyam’s accounts by more than $1 billion.
• Represented KPMG LLP in an action filed by securities purchasers in the Eastern District of Pennsylvania. The action alleges that KPMG consented to the incorporation into a registration statement and prospectus of its audit report on the company’s materially misstated financial statements.
• Represented Ernst & Young in a series of matters concerning Bally Total Fitness, including securities class actions and shareholder derivative suits.
• Represented Crowe in a securities class action pending in federal court in Colorado relating to the bankruptcy of United Western Bancorp. The case alleges a claim under Section 11 of the Securities Act against Crowe.
• Represented Grant Thornton in litigation and related matters arising from the OCC's closure of First National Bank of Keystone, West Virginia, because of management fraud. The FDIC, bank shareholders and other plaintiffs filed claims against Grant Thornton.

Consulting Matters

• Representation of Deloitte & Touche in connection with disputes arising out of a consulting engagement. We quickly assessed the claims and advised on options for a resolution of the dispute. We prepared position papers and achieved a successful resolution of the disputes through mediation.
• Representation of Accenture in connection with disputes with another vendor arising during a multi-year outsourcing engagement. We investigated multiple complex claims and defenses in the context of an ongoing engagement while minimizing any disruption to Accenture's client. The matter was successfully resolved through arbitration.
• Representation of Ernst & Young in connection with a dispute relating to a consulting engagement on a computer ordering system. The case settled on favorable terms after discovery.

Law Firm Matters

• We represented a national law firm in its defense of misconduct allegations related to a criminal investigation of suspected fraud by corporate insiders. The matter was resolved without charges against the law firm.
• We defended an international law firm in a securities class action alleging that the firm was negligent in its preparation of a private placement memorandum. The case was settled on terms favorable to the law firm.
• We represented a law firm partner in a professional misconduct case arising out of a litigation matter. The law firm had successfully defended its client in a civil case, securing the entry of summary judgment against the plaintiff on all claims. Thereafter, the plaintiff filed a new lawsuit—this time against the law firm—alleging that the firm had committed a fraud upon the court in its handling of the underlying case. We filed a motion to dismiss, in response to which the plaintiff withdrew the complaint.
• We represented national law firms in a series of malpractice suits alleging that the defendant firms failed to draft joint venture agreements in a manner that would have allowed the clients to take advantage of government preferences for disadvantaged businesses. These cases were settled on terms favorable to our clients.