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MF Global Customers File Lawsuit Against PwC
November 10, 2012
Customers of MF Global filed a lawsuit against the bankrupted derivatives broker in 2011. That lawsuit has recently been amended to include PwC as a defendant.
PwC served as the independent auditor of MF Global between 2010 and 2011. Over $1.6 billion in customer funds went missing when the MF Global filed for bankruptcy. Customers argue that the firm neglected to live up to its responsibilities as an auditor. They claim that PwC should have seen warning signs that MF Global was failing to oversee customer funds adequately.
Caroline Nolan, a representative from PwC, said that the former customers have no basis for these claims. She said that PwC conducted its last audit in accordance with professional and regulatory guidelines. She said that the firm will rigorously defend against the lawsuit.
The plaintiffs in the class action lawsuit disagrees with Nolan’s statement. The lawsuit states that PwC ignored indications that MF Global was not managing its accounts appropriately. The plaintiffs stated that if PwC had conducted its due diligence it would have been able to advise MF Global customers of the fraud so they would have had ample time to react.
James Giddens is the trustee for the liquidation of MF Global. Giddens is cooperating with lawyers from the plaintiff in their case against MF Global, PwC and the CME Group.