A federal court in New York has allowed the state to intervene in a whistleblower’s suit claiming that global headhunter Egon Zehnder knowingly underpaid New York taxes.

New York moved to intervene to get the US District Court for the Southern District of New York’s approval of the settlement it reached with the company on the New York False Claims Act allegations. The terms of the settlement aren’t public, but American Advisory Services LLC, the whistleblower that filed the suit on the state’s behalf, objects to the deal.

In an order filed Thursday, Judge Lewis J. Liman agreed the ...

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