Lawyers Call Crisis 'Unprecedented'

09.29.2008
Law 360

Nossaman Partner and Chair of the firm's Litigation Department, Patrick Richard, is quoted in the Law360 article, "Lawyers Call Crisis 'Unprecedented.'"

Law360 asked Mr. Richard, who has represented the FDIC in previous bank failures, to comment on the current economic crisis. He is quoted as saying, "In Washington Mutual we've just witnessed the largest bank failure in U.S. history, and what some on Wall Street are calling "the Armageddon of finance." Many are focusing on the political climate or economic models that may have made such calamity likely; others are suggesting we not fix blame or understand the causes. However, if we consider the anatomy of a bank failure, a common question emerges: Where were the auditors? Where were the outside independent auditors? These are the professionals reviewing, auditing and certifying on a year-round basis the soundness of the entity's financial statements. The outside auditors are required to bring a "healthy skepticism" to the representations of management. Yet too often they simply provide a clean bill of health."

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