The Federal Deposit Insurance Corporation (FDIC) has announced a $335 million settlement with PricewaterhouseCoopers to resolve professional negligence claims arising out of audits PwC conducted of the failed Colonial Bank, located in Alabama.
On December 28, 2017, the United States District Court for the Middle District of Alabama held PwC liable for professional negligence in its audit of Colonial Bank and, on July 2, 2018, the district court awarded damages to the FDIC on its claims. The settlement, however, is significantly lower than the $625.3 million a federal judge ordered the firm to pay the regulator at that time. FDIC board member and former chairman Martin Gruenberg dissented from the settlement because it did not require PwC to admit liability.
“PricewaterhouseCoopers LLP and the Federal Deposit Insurance Corporation 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.
Previously, on April 3, 2018, the FDIC settled professional negligence claims against Crowe Horwath arising out of its internal audits of Colonial Bank for $60 million.
Colonial Bank of Montgomery, Alabama failed on August 14, 2009, with $25.5 billion in assets and a loss to the Deposit Insurance Fund estimated at $2.958 billion. 