E&Y Wins Class Action Trial

Securities class actions rarely go to trial, but that does not mean they never go to trial. The Recorder reports (via law.com – free regist. req’d) that Ernst & Young has achieved a trial victory in a securities class action brought in the N.D. of Cal. and based on the accounting firm’s work for Clarent Corp. The plaintiffs filed the class action after accounting irregularities at Clarent came to light in 2001. Although the jury found no liability for Ernst & Young, Clarent’s former CEO was found liable for an accounting misrepresentation. Plaintiffs’ counsel has issued a press release stating that the trial was only the third trial of a securities class action in the last ten years.