PricewaterhouseCoopers (PwC) has agreed to pay $335m to settle claims of ‘professional negligence’ in auditing work of Colonial BancGroup, an Alabama-based lender which failed in 2009.
PwC will pay the fine to Federal Deposit Insurance (FDIC), which is the receiver of the failed bank.
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The figure is significantly less compared to $625.3m damages ordered by an US court in July last year.
PwC fined: Background
The FDIC sued PwC for alleged professional negligence during auditing work of the Colonial Bank.
During the trial, PwC claimed that no damages are justified as multiple Colonial employees interfered with the auditing work.
However, PwC has now agreed to pay the money to settle the case.
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By GlobalData“PwC and the FDIC as receiver for Colonial Bank have settled professional negligence claims brought by the FDIC-R against PwC to their mutual satisfaction,” PwC said in a statement.
Colonial Bank failed on August 14, 2009, with $25.5bn in assets. The failure is estimated to have caused a loss of $2.958bn to the Deposit Insurance Fund, as of 31 December, 2017.
Before its failure, Colonial Bank had around 340 branches.
In her judgment July last year, US District Judge Barbara Rothstein said that PwC failed to identify a multi-year fraud between Colonial and its client Taylor, Bean & Whitaker.
Earlier in December, the same judge also found PwC guilty in a non-jury trial.
