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MF Global customers add PricewaterhouseCoopers as defendant in lawsuit

Former clients accuse the accounting firm of improperly auditing the bankrupt brokerage’s internal controls over customer funds

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:

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MF Global trustees ask judge to dismiss improper termination lawsuit

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MF Global GC will testify tomorrow at House hearing

MF Global customer says entire $50 million account missing

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MF Global’s customer account discrepancies spur regulatory probe

Alanna Byrne

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