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United States Second Circuit

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Overton v. Todman & Co., CPAs, P.C., 06-2496

Dismissal of securities fraud claim is vacated as an auditor may incur primary liability under section 10(b) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5 when the auditor: 1) makes a statement in its certified opinion that is false or misleading when made; 2) subsequently learns or was reckless in not learning that the earlier statement was false or misleading; or 3) knows or should know that potential investors are relying on the opinion, yet fails to take reasonable steps to correct or withdraw its opinion and/or the financial statements.

Appellate Information

  • Decided 02/26/2007
  • Published 02/26/2007

Judges

  • STRAUB, Circuit Judge., Before KEARSE, McLAUGHLIN, and STRAUB, Circuit Judges.

Court

  • United States Second Circuit

Counsel

  • For Appellant:
  • Eric S. Hutner, Hutner Klarish LLP, New York, NY, for Plaintiffs-Appellants.

  • For Appellees:
  • Jordan Sklar, Babchick & Young LLP (Jack Babchik, on the brief), White Plains, NY, for Defendants-Appellees.
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