Case Analysis Of Cardozo & Co. Inc. Essay

1799 Words Jan 16th, 2016 8 Pages
Questions Presented
I am being sued by investors in Cardozo & Co., Inc. who invested in the IPO, and others who invested in anticipation of the proposed merger. He is also being sued by Prosser bank who relied on Cardozo & Co., Inc 's proxy statements to issue them a loan. What common and statutory liabilities I and what accountant client privilege does he have?
Brief Answer
Under common law I would be found liable for negligence to the investors in Cardozo & Co., Inc. but not to Prosser Bank. He will also be found liable to Investors under the Securities act of 1933 and the Securities Exchange Act of 1934. Professional-client privilege would not enable me to refuse to respond to a subpoena from a government agency and the working papers created by him would be entered into evidence.
Facts
I failed to detect multiple inaccuracies in Cardozo & Co., Inc 's Expertise portion of the registration statement filed with the SEC and in the prospectus that was disseminated to the public before the IPO. I did find several irregular entries that he suspected to be bribes but he took no action regarding the information.
I also rendered tax advice concerning tax shelters in the Cayman Islands to the firm 's president. In addition, he prepared financials or the proxy statements that were filed with the SEC In anticipation with the merger. The proxy statements were used by Prosser bank without my knowledge) to secure a loan for Cardozo & Co., Inc. It was revealed that Cardozo &…

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