A group of investors that lost over $17 million after a Plano-based hedge fund that promised low risk investments collapsed are suing Ernst & Young for Texas securities fraud. Parkcentral Global sold the two funds involved.
According to the Houston securities fraud complaint, although E & Y was auditing Parkcentral, the audited financial statements never warned investors that they were in financial trouble. Investors quickly lost every cent they invested even though they were promised that placing their money in Parkcentral would preserve capital. Parkcentral, which is now-defunct after losing over $2.6 billion, used to be run by affiliates of former presidential candidate H. Ross Perot
The plaintiffs contend that not only did E & Y make false representations that it fairly audited Parkcentral, but also it failed to fulfill its role as “watchdog” for investors. They are accusing E & Y of Texas securities fraud, fraud, negligent misrepresentation, and conspiracy.
Earlier this month, one of the plaintiffs, Brown Investment Management, L.P., won a Delaware Supreme Court case requiring that Parkcentral Global disclose the identity of its investors, which means that their names could also be added to the Houston securities case. Other current plaintiffs include Thomas R. Brown Family Private Foundation, SBS Ventures LLC, and MBB Ventures LLC. They are seeking actual and punitive damages.
Related Web Resources:
Ernst & Young Facing Securities Fraud Lawsuit in Houston Over Failed Hedge Fund, Digital Journal, August 26, 2010
Ernst & Young Sued by Investors in Parkcentral Funds, Bloomberg BusinessWeek, August 26, 2010
Delaware Supreme Court Says Hedge Fund Investors Are Entitled to Ownership List, Securities Technology Monitor, August 25, 2010
Other Recent Texas Securities Fraud Stories on Our Blog Site:
Texas Securities Fraud Incidents on the Rise, Say State Officials, http://www.stockbrokerfraudblog.com, August 18, 2010
Dallas Billionaire Brothers Charged with Texas Securities Fraud, http://www.stockbrokerfraudblog.com, July 31, 2010
Contact our Houston, Texas securities fraud law firm to request your free consultation.