PwC to pay $335 million over failed audits of Alabama’s Colonial Bank: U.S. regulator

FILE Photograph: The exterior of PricewaterhouseCoopers (PWC) is noticed in Washington, DC, U.S. December 6, 2017. REUTERS/Mike Stone

WASHINGTON (Reuters) – A top rated U.S. banking regulator outlined on Friday that PricewaterhouseCoopers will pay back again $335 million to settle claims of “professional carelessness,” pursuing indicating the auditor have to have to have determined issues principal to the 2009 collapse of Alabama-based mostly Colonial Lender.

PwC did not validate or deny the claims, but agreed to pay back again the settlement excellent, the Federal Deposit Insurance policies system Company (FDIC) outlined in a assertion.

The settlement is noticeably reduced than the $625.three million a federal decide ordered the company to pay back again the regulator in July.

Martin Gruenberg, an FDIC board member and its previous chairman, dissented from the settlement for the rationale that it did not have to have PwC to confess legal responsibility.

The FDIC knowledgeable sued the enterprise in its placement as receiver for Colonial Lender, which the moment knowledgeable all-around $20 5 billion in possessions and 340 branches.

At the time, PwC knowledgeable argued that the FDIC could get better $306.seven million at most, and that no damages experienced been justified for the rationale that a large amount of Colonial workforce knowledgeable interfered with its audits.

U.S. District Choose Barbara Rothstein dominated in July that PwC failed to recognize a extremely lengthy-operating fraud involving the lender and its finest purchaser, the mortgage loan loan provider Taylor, Bean & Whitaker. Each similarly failed in 2009, and the FDIC alleged the lender served Taylor conceal overdrawn accounts.

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“PricewaterhouseCoopers LLP and the Federal Deposit Insurance policies system Company as Receiver for Colonial Lender have settled pro carelessness claims introduced by the FDIC-R in opposition to PwC to their mutual achievement,” PwC outlined in a assertion.

Reporting by Katanga Johnson and Pete Schroeder Enhancing by Dan Grebler

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