Grant Thornton hit by SEC fraud indictment

Grant Thornton, the audit company at the centre of the Parmalat scandal, is to be sued for fraud by the Securities and Exchange Commission in the US over the collapse of the mortgage banking company MCA Financial Corporation in 1999.

Grant Thornton, the audit company at the centre of the Parmalat scandal, is to be sued for fraud by the Securities and Exchange Commission in the US over the collapse of the mortgage banking company MCA Financial Corporation in 1999.

The SEC claimed that the "abysmal failure" of Grant Thornton in its audit work contributed to losses of millions of dollars for investors. The fraud action is another major embarrassment for Grant Thornton, which has already seen its ex-chairman and a partner of its former Italian affiliate arrested in connection with the €10bn Parmalat scandal.

In proceedings begun last week - which also name Doeren Mayhew, another US audit company - Stephen Cutler, the director of the SEC's enforcement division, said: "We are suing not only the audit partners of Grant Thornton and Doeren Mayhew, who contributed to MCA's accounting fraud, but the audit firms themselves. That is because the failures set forth in the administrative complaint are not just personal failures - they are institutional failures."

A spokesman for Grant Thornton said: "For 80 years we have adhered to the highest standards of professionalism and we will vigorously defend ourselves against these charges."