Deloitte & Touche (D&T) was yesterday found to be negligent when it audited the Singapore operations of Barings Bank, where trader Nick Leeson racked up Ј791m in unauthorised trading losses.
But in what was a marginal victory for the liquidator of the merchant bank that collapsed in 1995 under the weight of Mr Leeson's losses, a High Court judge said Barings management - both in Singapore and London - had also been guilty of "a high level of fault". In particular, it continued to fund the trader "without any serious attempt" to investigate why the money was needed.
Mr Justice Evans-Lombe also found that the auditors' negligence was on two counts only, and that the audits generally were "conducted with great thoroughness, for very low fees".
The decision means that creditors of Barings are likely to recover only a small fraction of the Ј130m in damages originally sought from the auditors.
