Deloitte Allegedly Certified False Returns for Direct Lending

Advisory firm Deloitte allegedly failed to detect financial fraud leading to the collapse of a $789 million private fund structure, and certified false reports based on inflated returns, investors say in a complaint filed in a California superior court.

Deloitte was hired to audit financial statements for a fund managed by Direct Lending Investments LLC, the suit says. Deloitte certified statements on Direct Lending’s assets, net worth, and earnings, and sent information to investors, the suit says.

Deloitte knew that investors would use their certifications to make investment decisions, the suit says, but didn’t obtain evidence to support Direct Lending’s ...