Roberto Frientas and Herman Graham formed an IT consulting business, which they organized as a limited liability partnership, Accent Pointe LLP. For the most part, each LLP client was assigned either to Frientas or Graham, but not both. On behalf of the LLP, Graham did an IT audit for Bemus, Inc., which required Graham to ensure that Bemus's IT controls complied with section 404 of the Sarbanes- Oxley Act. Graham failed to check whether the client had an off-site backup system for critical records like accounts receivable information, an omission that resulted in Bemus's failure to comply with section 404. As a result, when Bemus's system crashed internally, Bemus was unable to verify some of its receivables, resulting in a loss of $500,000. Bemus sued Graham, Accent Pointe LLP, and Frientas to recover its damages. Who is liable to Bemus?

  • CreatedJuly 16, 2014
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