FutureSelect v. EY
Between 2000 and 2003, Ernst & Young was retained by FutureSelect Portfolio Management Inc. to audit Madoff-linked Broad Market Funds. The accounting firm continued to perform surprise audits of the funds until 2008, leading up to the conviction of Bernie Madoff. FutureSelect accused Ernst & Young of failing to perform adequate audit procedures and instead relied on audit statements made by Madoff’s own accounting firm Friehling & Horowitz, a small auditing firm that was never properly vetted by Ernst & Young. As a result of Ernst & Young’s negligence to perform adequate audit procedures to test the existence of assets on the fund’s financial statements, FutureSelect suffered losses in the Bernie Madoff Ponzi scheme, and sought to recoup the damages in Seattle state court.
The Focal Point’s Role
The Focal Point has a long-standing relationship with the trial team at TAF Attorneys, and worked closely with them to create compelling and dramatic demonstratives that showcased the blatant negligence of Ernst & Young and their faulty auditing procedures. The Focal Point worked alongside the TAF attorneys in Seattle throughout the trial to fine-tune Opening and Closing presentations, collaborated with expert witnesses, and developed cross-examination and rebuttal materials. The result was a compelling narrative for the jury that inexplicably placed Ernst & Young as one of the major parties responsible for Bernie Madoff’s ability to uphold his scheme.
After a four-week trial, jurors found Ernst & Young liable in FutureSelect’s negligence suit over its alleged failure to properly audit the funds. The result was a verdict that exceeded $20 million in damages. More importantly, this case was the first case where a jury held a major accounting firm responsible for the loss of investor funds during the Madoff period.
Superior Court of the state of Washington, King County
Judge Beth M. Andrus
The Focal Point’s Client