Texas Justices Doubt Fraud in $20 Million Accounting Error

An accountant’s error was likely the result of sloppy work, Texas Supreme Court justices indicated Wednesday, not fraudulent activity as asserted by a home builder who says he lost as much as $20 million in the mishap.

The justices repeatedly pressed the home builder’s lawyer during oral arguments Wednesday for evidence of fraudulent behavior on the part of two accountants who made a dramatic accounting error—and came up wanting.

“All the things you described to me sound like professional services performed poorly—very poorly,” Justice Evan Young said, calling the errors “malpractice,” but not fraud.

“What ...