Deloitte & Touche Prevails in Auditor Restatement Case

Skadden won an important decision in the Supreme Court of the State of New York on behalf of client Deloitte & Touche. The complaint arose out of corporate fraud committed by members of Symbol Technologies' management. Symbol alleged that Deloitte had failed in its responsibilities as auditor by failing to detect the fraud. This was the first time that a New York court has addressed how the statute of limitations on auditor malpractice claims and the continuous representation doctrine apply to an audit restatement in the wake of a 2007 New York Court of Appeals decision. The court ruled on June 16 that Symbols' claims are time-barred since the restatement was a separate engagement and the doctrine of continuous representation did not apply. Applying in pari delicto, the court further held that the misconduct of Symbols' corporate management served as a bar to the claim.