PwC must face MF Global lawsuit over accounting advice
A US Judge has given the go-ahead for a $1bn lawsuit against PwC over claims the firm provided bad accounting advice which contributed to the 2011 collapse of MF Global.
MF Global and its parent company, MF Global Holdings Ltd, collapsed in October 2011 after investors left the firm on learning about risky bets on sovereign debt taken by former chairman and New Jersey Senator Jon Corzine.
In a 69-page decision, Judge Victor Marrero of US District Court in Manhattan said there remained open questions about whether PwC’s alleged bad accounting advice was a substantial cause of MF Global’s collapse, Reuters reported.
Corzine is not a defendant in the lawsuit, which was filed in March 2014 by MF Global’s bankruptcy plan administrator.
“PwC stands by its work for MF Global,” James Cusick, a lawyer for the firm, said in a statement. “MF Global’s collapse was caused by its own business decisions and adverse market events, not any accounting determination.”
In April 2015, PwC reached a $65m cash settlement with former shareholders and bondholders, in which it denied wrongdoing.
Source: Accountancy Age
