PwC faces largest ever auditor malpractice damages verdict

[nitpicker]

https://www.marketwatch.com/story/pwc-faces-largest-ever-auditor-malpractice-damages-verdict-2018-04-05

PwC faces largest ever auditor malpractice damages verdict

Published: Apr 5, 2018 3:48 p.m. ET

The Federal Deposit Insurance Corp. could collect the largest damage award ever against a global public accounting firm when a federal judge decides what to award the agency after a verdict against PricewaterhouseCoopers. The FDIC, acting as receiver for the failed Colonial Bank Group that collapsed in 2009, has asked Judge Barbara Rothstein to award it $625 million in compensation for the net losses it sustained in paying depositors and other creditors of the bank from the federal deposit insurance fund. Even PwC’s offer of $306 million would result in the largest-ever final judgment or jury verdict for accounting malpractice, and the fifth-largest accounting malpractice award ever, according to data compiled by research firm Audit Analytics. Rothstein is not required to accept either version of the damage estimates.

The potential damage award comes after Rothstein issued a decision at the end of 2017 that PwC had been professionally negligent in not detecting the criminal fraud that led to the failure of Colonial Bank Group in 2009.
(snip)

Taylor Bean & Whitaker and Colonial Bank collapsed in 2009, after federal regulators, not the auditors, found a $3 billion fraud involving fake mortgage assets. In 2012, the trustee of the Taylor Bean & Whitaker Bankruptcy Plan sued both TBW’s auditor, Deloitte LLP, and Colonial’s auditor, PwC, for negligence, seeking $7 billion in damages from Deloitte and $5.5 billion in damages from PwC.

In 2013, just weeks before starting a trial, Deloitte agreed to settle; the parties mutually agreed not to disclose the amount. On August 16, 2016, three weeks into a jury trial for the TBW Trustee’s claims, PwC stopped the proceedings by agreeing to settle. Again, the amount was not disclosed.

This time the public will find out how much PwC has to pay for allegedly not detecting the fraud at Colonial Bank that led to its failure. That’s because federal law prohibits the FDIC from entering into a confidential settlement.
(snip)

[Sherman A1]

1. I would think that

every dime they have would be a great place to start for the fine to reimburse the FDIC for it's payouts and the costs of the proceedings.