ABSTRACT
The jury’s $81 million judgment against Arthur Andersen in the Fund of Funds’ case stunned the entire public accounting profession. The amount was more than double what any accounting firm had ever been required to pay for losses sustained by a client’s shareholders. Representatives of all the major accounting firms expressed concern that the Fund of Funds verdict would stimulate more frequent claims against auditors. And auditors feared that future plaintiffs would use the Fund of Funds case as a precedent to seek higher amounts of damages. Coopers & Lybrand’s general counsel warned, “When people think there’s a pot of gold at the end of the rainbow, they persevere in their claims.”2
