On June 29, 2010, the New York Court of Appeals affirmed a trial court decision to enter summary judgment on behalf of accounting firm PricewaterhouseCoopers, LLC (PwC) in ongoing litigation over its part in a fraud committed by its client, hedge fund Lipper Convertibles, LP (the fund).  The fund had intentionally overstated its assets using improper methods for valuing securities.  PwC, tasked with auditing these financial statements, fraudulently attested to their accuracy and their conformity with generally accepted accounting principles (GAAP).  Those disclosures, in turn, induced the Plaintiffs to invest in the fund, which resulted in extensive litigation once the fraud was discovered and the investors lost millions.  The Court of Appeals terminated the fraud aspect of the litigation against PwC by the investors because an overlapping, independent action against PwC, litigated by the fund’s Trustee in bankruptcy for the benefit of all investors, provided them with a direct remedy for the damages they claimed to have suffered.  We summarize the background of the action and the Court’s legal analysis.