October 4, 2025
Stone & Rolls Ltd (in liq) v Moore Stephens (a firm) [2007] EWHC 1826 (Comm)
A 'one-man' company, used entirely as a vehicle for a massive fraud by its sole director, sued its auditors for negligently failing to detect the fraud. The court held that the fraud was attributed to the company, barring its claim based on the illegality principle (ex turpi causa). Facts Stone & Rolls Ltd (S&R), acting through its liquidators, brought a claim for over US$94 million against its auditors, Moore Stephens (MS). The claim was for negligence, alleging that MS had failed in its duty to detect and report a massive, fraudulent scheme perpetrated by S&R’s sole director and shareholder, Mr
