KPMG faces $1bn lawsuit for sub-prime auditing

New Century Financial, which collapsed in April 2007, left banks and investors with huge losses on mortgage-backed securities they bought from the lender. Two lawsuits have been filed against KPMG, the world's third largest accountancy firm, by a trustee representing its creditors. A New York court action, filed against KPMG's US operations, accuses auditors of approving "materially misstated" financial reports. The second suit, filed in Los Angeles against KPMG International, says the parent company was reckless and negligent in its managing of its US business. The trustee says KPMG...