KOURI v. SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES
Investors established triable claim of fraud against accounting firm that allegedly deliberately or recklessly certified statements that showed corporation to be worth far more than its actual value, where plaintiff's expert opined that defendant's deviation from generally accepted accounting principles and other professional standards in approving company's financial statements and balance sheet was so egregious that it could not have been accidental, and defendant admitted that it approved company's placement of contingent assets on its balance sheet and financial statements even though the contingencies were still in place, contrary to assurances defendant had given the SEC. Where plaintiffs exchanged real estate for stock, then entered into contract to sell 80 percent of stock but did not complete the sale because buyer did not pay and instead held onto the stock for a time before attempting to sell it to another buyer, and where plaintiffs presented evidence that by the second time they tried to sell the stock, they had seen audit report and relied on it in pursuing the sale instead of hiring an attorney to rescind their stock purchase and recover their real estate, and that they additionally relied on the audit report in deciding to hold onto the 20 percent of the stock they never tried to sell, plaintiffs' initial attempt to sell their stock without reliance on audit report did not bar their claim for negligent misrepresentation.
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