SEC Urges Second Circuit to Reconsider AmTrust, BDO Fraud Ruling

The Second Circuit Appeals Court should reconsider a ruling that declared audits for AmTrust Financial Services Inc. too generic to be meaningful to investors, lawyers for the Securities and Exchange Commission said.

An August decision in a shareholder class action case against insurer AmTrust and auditor BDO USA P.C. dismissed claims against the auditor. The SEC weighed in on the case in a friend of the court brief on Friday, asking the court to reconsider that ruling and to protect the regulator’s authority to hold auditors accountable for rubber-stamp reviews.

Investors sued both AmTrust and its auditor for losses stemming ...