In the suit, plaintiff John A. Malack alleged ABFS hid the truth about the risk of its notes by improperly delaying the labeling of some of its loans as delinquent, making the value of the portfolio look better than it actually was. The suit said BDO's audit reports approving ABFS's accounting standards allowed them to rely on the value of the notes.
Law.com - 3rd Circuit Gives Thumbs Down to 'Fraud-Created Market' Theory
Law.com - 3rd Circuit Gives Thumbs Down to 'Fraud-Created Market' Theory