Jonathan S. Ziss, a partner in Goldberg Segalla’s Professional Liability Practice Group, was interviewed by Forbes writer Francine McKenna for her “Accounting Watchdog” blog. The article examines the potential use of the in pari delicto defense in the FDIC’s recently filed lawsuit against auditor PricewaterhouseCoopers for professional malpractice and breach of contract over the failure of Colonial Bank — the first FDIC suit against an auditor for financial crisis-era bank frauds or failures.
Francine asked Jonathan whether there is “anything special about Alabama as a venue that would make this a good choice as the first crisis-related case against auditors.”
“We don’t see anything in Alabama law that would give the government cause for great confidence,” Jonathan said. “The in pari delicto defense has been recognized, as has the adverse interest exception. The case law isn’t especially mature, though, so perhaps the FDIC likes its chances with the Colonial fact pattern.”