Management Fund Sues Auditors for Negligence for Not Discovering Fraud

Maxam Capital Management LLC, an investment fund, has filed suit against its auditors, McGladrey & Pullen, LLP and Goldstein Golub Kesssler LLP for professional negligence.  Maxam apparently invested all of its assets with Bernard Madoff and alleges that its auditors were negligent in accepting documents created by Madoff rather than seeking independent confirmation of holdings and trades when performing the audit of Maxam’s financial statements. 

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