The defendants, an auditing firm, brought a motion for summary judgment to dismiss a $5 billion negligence claim arising from their audits of feeder funds that invested in the Bernard Madoff Ponzi scheme.
The plaintiffs alleged that the auditors failed to discover the fraud, causing the funds to remain invested and suffer massive losses.
The court granted summary judgment, finding that the plaintiffs failed to prove any damages.
Applying the plaintiffs' own damages formula, the court concluded that the funds actually benefited from the delayed discovery of the fraud due to net withdrawals and the exclusion of fictitious profits and unasserted liabilities.
