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PwC Ordered to Pay $625 Million in Damages Over Bank's Audit

  • Alabama judge found in December firm was negligent over audit
  • Colonial Bank collapsed in 2009 after fraud by largest client
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Photographer: Alex Kraus/Bloomberg
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PricewaterhouseCoopers LLP was ordered to pay the Federal Deposit Insurance Corp. more than $625 million for negligence in the audit of Colonial BancGroup Inc., an Alabama bank holding company that failed during the financial crisis.

U.S. District Judge Barbara Jacobs Rothstein issued the ruling Monday granting the FDIC’s damages request after she found in December that Pricewaterhouse had failed in its audits of the bank from 2003 to 2005 and for 2008. The firm didn’t design its audits to detect fraud or gather enough evidence of its funding to sign reports for those years, she said.