According to court documentation, PricewaterhouseCoopers (PwC) has settled a lawsuit with MF Global investors. According to the accusations, the auditor fraudulently deceived investors in the bankrupt brokerage, which at the time was run by former New Jersey Governor Jon Corzine.
Subject to court approval, PwC has agreed to pay $65 million in cash to settle the lawsuit. If approved, the agreement will put an end to class action claims that in 2010 and 2011, PwC has failed to conduct due diligence when certifying that it had properly audited MF Global’s financials and internal controls.
According to the accusations in the class action lawsuit the company was aware of the issues which forced MF Global into bankruptcy in October 2011.
the firm stands behind its audit work and its opinions on MF Global’s financial statements
Before being put under special administration, the brokerage has been providing contracts for difference (CFDs), foreign exchange and spread betting services to clients. At the time, MF Global filed for bankruptcy protection after a bet made by the company on European sovereign debt paper turned sour.
Can You Trade Cryptos Like Any Other Currency?Go to article >>
The financial condition of MF Global substantially deteriorated after the firm made clint money transfers to corporate accounts in order to cover some losses which the brokerage incurred. The company placed leveraged bets on some European sovereign debt government paper.
As the exposure of the company to the market went deeply into the red, MF Global made improper transfers totaling to more than $891 million from client money funds.
The PwC settlement does not constitute an admission of wrongdoing. The lead plaintiffs in the class action lawsuits are the Virginia Retirement System and the Province of Alberta, Canada.
A spokesperson for the auditing company stated to the media, “PwC is pleased to resolve this matter and avoid the cost and distraction of prolonged securities litigation. The firm stands behind its audit work and its opinions on MF Global’s financial statements.”
The settlement is not related to a $1 billion lawsuit filed by MF Global’s bankruptcy plan administrator which is accusing PwC of professional malpractice.