Gotta add the accounting firms such as KPMG. This looks to be a replay of Enron like auditing scandals of a few years back. As investors, what kind of financial audit info can we trust? Lack of tranparency and confidence is gonna prolong this credit crunch on Wall Street.
“New Century Bankruptcy Examiner Says KPMG Aided Fraud (Update4) By Tiffany Kary
March 26 (Bloomberg) — New Century Financial Corp.’s bankrupt estate might have cause to sue its former accountant KPMG LLP and some directors and officers for improper accounting leading up to its bankruptcy, a court examiner said in a report.
The company, once the second-biggest U.S. subprime-mortgage lender, engaged in accounting fraud in 2005 and 2006 before filing for bankruptcy in April 2007, according to the 581-page report by court examiner Michael J. Missal unsealed today.
New Century “engaged in a number of significant improper and imprudent practices related to its loan originations, operations, accounting and financial reporting processes,” Missal wrote in the report. He said “KPMG contributed to certain of these accounting and financial reporting deficiencies by enabling them to persist” and in some cases “precipitating” a departure from “applicable accounting standards.”………”
