Accounting firm Grant Thornton threw in the towel last week in auditing subprime lenders Fremont General Corp. and Accredited Home Lenders. Both lenders disclosed that Grant Thornton resigned after advising them it would need to "significantly expand" the scope of its audit of their 2006 financial statements. The auditor reportedly said the two companies no longer met its "requirements for client acceptance." Some sources speculated the auditor was frazzled by certain aspects of the industrywide practice of valuing mortgage loans - an issue some have referred to as "Enron accounting." In the case of Fremont, Grant Thornton wrote in a Securities and Exchange Commission filing that the lender did not provide information needed to complete its review on dates previously agreed upon. Fremont denies this allegation. Grant Thornton also noted that, aside from the current industry environment, there were "significant events" that occurred within Fremont which required an expanded audit.
Deutsche Bank appointed Tim Nicolle as a managing director with responsibility for securitization in Central and Eastern Europe, Middle East and Africa. He will start his position in the second quarter of 2007.