Question: Equisure Inc was required to file audited financial statements when
Equisure, Inc., was required to file audited financial statements when it applied for a listing on the American Stock Exchange (AMEX). Stirtz, Equisure’s auditor, issued a favorable audit opinion used for the AMEX application. Stirtz also issued “clean” opinions on Equisure’s required SEC filings, such as its 10k. Noram, a securities broker, loaned $900,000 in margin credit to purchasers of Equisure’s stock based on the firm’s audited financials. AMEX stopped trading on Equisure’s stock because of allegations of insider trading and stock manipulation, and Noram was left without collateral for $2.5 million in loans. Stirtz resigned as Equisure’s auditor, and Noram filed suit against Stirtz. The trial court granted Stirtz summary judgment. Noram appealed. Who is liable here? Was the court’s decision correct? [Noram Investment Services, Inc. v. Stirtz Bernards Boyden, 611 N.W.2d 372 (Minn. App.)]
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