UPDATE 1-PwC to pay $65 mln to resolve lawsuit over MF Global

Fri Apr 17, 2015 4:10pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

(Adds details of settlement, comments, case citation, byline)

By Jonathan Stempel

NEW YORK, April 17 (Reuters) - PricewaterhouseCoopers agreed to pay $65 million in cash to settle a lawsuit claiming it fraudulently deceived MF Global Holdings Ltd investors about its auditing of the now-defunct brokerage, which was run by former New Jersey Governor Jon Corzine.

The preliminary settlement with investors in MF Global's common stock, bonds and convertible debt was disclosed in papers filed on Friday with the U.S. District Court in Manhattan, and requires court approval.

It resolves class action claims that PwC in 2010 and 2011 falsely certified that it had properly audited MF Global's financials and internal controls, and knew about or recklessly disregarded problems that contributed to the brokerage's Oct. 31, 2011, bankruptcy.

PwC denied wrongdoing in agreeing to settle. The lead plaintiffs are the Virginia Retirement System and the Province of Alberta, Canada.

"PwC is pleased to resolve this matter and avoid the cost and distraction of prolonged securities litigation," spokeswoman Caroline Nolan said. "The firm stands behind its audit work and its opinions on MF Global's financial statements."

MF Global filed for Chapter 11 protection as worries mounted about its $6.3 billion bet on European sovereign debt, credit rating downgrades, margin calls and news that money from customer accounts was used to cover liquidity shortfalls.

Friday's settlement is separate from a $1 billion lawsuit filed by MF Global's bankruptcy plan administrator that accused PwC of professional malpractice.   Continued...