Massive Negligence Suits Threaten Pricewaterhouse

PricewaterhouseCoopers is having to defend against negligent audit allegations in three major U.S. lawsuits, including one in Florida state court that is being described as the largest accounting negligence suit ever gone to trial. The defendant in all three suits is PricewaterhouseCoopers LLP, the U.S. member of the larger global PwC entity. Whether a loss in some all of these matters would threaten the survival of the U.S. company is a real question, according to sources in a MarketWatch article. According to Tom Rohback, an attorney with Axinn Veltrop & Harkride, the scenario in the Florida cased is highly unusual not only because of its magnitude and the fact it’s going to trial at all, but because the plaintiff is the trustee of the now bankrupt mortgage company that allegedly committed fraud. That plaintiff, he says, “is suing not its own audit firm but the audit firm of the institution it defrauded.” That institution is Colonial Bank in Alabama, which bought the allegedly fake mortgages. It filed for bankruptcy in 2009, and its trustees have also sued PwC.