A jury has awarded hedge fund founder Kenneth Lipper $6 million in his lawsuit against PricewaterhouseCoopers over a valuation of his hedge fund, Lipper & Co. According to an article in Law360, Lipper claimed that the valuation was inflated due to “garbage numbers” and cost him $6 million in gift taxes when he gave shares to his daughters.
PwC contended that it should not be on the hook because Lipper knew that one of his executives was systematically overinflating the fund’s securities. That executive pled guilty to fraud in 2003 and was sentenced to six years in prison—but the jury didn't hear about these facts during closing arguments. Lipper contended that he didn’t know about the executive’s actions and PwC should have alerted him about the inflated valuations.
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