Just more than a year after MF Global’s bankruptcy, some of its former customers have added accounting firm PricewaterhouseCoopers (PwC) as a defendant in a suit related to the broker-dealer’s demise.
According to the suit, PwC failed to properly examine MF Global’s internal controls over customer funds during independent audits in 2010 and 2011. After the brokerage declared bankruptcy last fall, regulators discovered a shortfall of roughly $1.6 billion in customer-segregated funds. “If PwC had properly executed its duties and evaluated and reported on [MF Global]’s control problems in March 2011, there would have been ample time for management to institute proper controls over customer funds,” the customers allege.
As part of the suit, the plaintiffs also reasserted claims against MF Global officials, including former CEO Jon Corzine, who allegedly violated the Commodity Exchange Act by improperly using client money.
A PwC spokesperson maintains that the two audits showed that MF Global’s customer accounts were compliant with federal regulations.
Read more at Thomson Reuters.
For more InsideCounsel coverage of MF Global, see:
Judge dismisses MF Global employee termination lawsuit
MF Global trustees ask judge to dismiss improper termination lawsuit
MF Global corporate trustee confident that customers’ funds will be returned
MF Global GC will testify tomorrow at House hearing
MF Global customer says entire $50 million account missing
7 banks targeted over MF Global collapse
FBI probe continues MF Global’s downward spiral
MF Global’s customer account discrepancies spur regulatory probe
