Is This Why The Big 4 Need Liability Reform?

So they can avoid responsibility for their affiliates on a client engagement where multiple offices are involved? Interesting example of the use of a settlement to avoid discussing issues of scheme liability in court.

PwC Agrees to Fund for Lauer’s Victims

PricewaterhouseCoopers will pay up to $22.5 million to create a settlement fund to benefit the defrauded investors of Michael Lauer and his Lancer fund family. PwC’s action in effect resolves (though without admitting any wrongdoing in connection with) claims that PwC issued false and misleading audit opinions and financial statements, aiding and abetting Mr. Lauer’s schemes.
Four years ago, the Securities and Exchange Commission asked the U.S. District Court in Miami to freeze the assets of Mr. Lauer and the funds he ran, after investors began to complain that he wasn’t allowing them to redeem their shares…

Distinctions among various entities that bear the common name “PricewaterhouseCoopers” turned out to be crucial to this resolution. PwC Netherlands Antilles was, as the settlement papers noted, “the entity which audited the financial statements in issue,” yet its pockets aren’t very deep. PwC International “appears to have had no involvement in the audits at issue,” and PwC U.S. was involved, and has “significant financial wherewithal,” but didn’t play the kind of significant role that PwC NA did, “and therefore would have minimal liability for the audits in issue.”

1 reply
  1. Anonymous
    Anonymous says:

    A more interesting story is why the SEC has yet to take the Lancer case to trial. How much money do you have to steal to get the SEC’s attention? Or is that they don’t like to handle politically sensitive cases? Small fry are so much more fun.

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