EY faces fraud allegations from investors

EY has been accused of facilitating a fraudulent scheme involving Brooge Energy, a UAE oil storage company, in a lawsuit filed in the Southern District of New York. Shareholders allege that EY played a “pivotal role in a years-long scheme” to defraud investors during a 2019 SPAC transaction, which initially valued Brooge at over $1bn. Following the revelation of fraud, Brooge’s shares plummeted by 99%. The lawsuit claims EY failed to detect clear signs of fraud and assisted in a “round-tripping scheme” to conceal falsified revenues. Neil Richardson, an investor involved in the lawsuit, stated: “This is an astonishing story of brazen, long-running, egregious fraud.” EY has denied the allegations, asserting that responsibility lies with Brooge’s principal shareholders and senior officers. The US Securities and Exchange Commission previously charged Brooge with using “false invoices” to inflate revenues by up to 80%.