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Madoff victims to sue PwC for billions of pounds: report

Madoff victims to sue PwC for billions of pounds: report
PTI
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First Published: Sun, Aug 23 2009. 06 03 PM IST
Updated: Sun, Aug 23 2009. 06 03 PM IST
London: World’s largest accounting firm, PricewaterhouseCoopers, is being sued for billions of pounds over its role as an auditor to one of the feeder funds that channelled huge amount of money to Bernard Madoff, the man behind the largest fraud in history, media report says.
“The Canadian arm of PwC has been named in seven separate lawsuits claiming as much as $2 billion in damages for investors who lost almost everything in the largest fraud in history,” the Telegraph said in a latest report.
PwC Canada was auditor to Fairfield Sentry, the feeder fund that placed $7.2 billion of investors’ money with Madoff and which became the biggest single casualty.
The firm is facing two class action lawsuits, two claims from individual investors and three “derivative actions” launched by investors on behalf of Fairfield Sentry.
PwC Canada has been accused of negligence for failing to spot that Fairfield Sentry’s $7.2 billion of assets simply did not exist.
PwC is the second global audit firm to be sued in relation to Madoff. KPMG has been targeted by investors in Tremont Group, which lost $3.3 billion. Sources said that PwC is taking the case very seriously and is anticipating more legal action.
The report further said that, “The most recent lawsuit to name PwC Canada as a defendant was filed just a couple of weeks ago and sources expect several more now that a precedent has been set.“
PwC has already been caught up in the Satyam scandal in India where, as auditors, it failed to spot the fraud.
Quoting PwC Canada, the report saidM “PwC Canada provided auditing services to the Fairfield Sentry fund, but was not the auditor for Bernard Madoff Investments where the alleged fraud occurred. PwC Canada’s auditing of the fund’s financial statements fully complied with professional standards.”
Arthur Andersen, then the world’s fifth largest accounting firm, had collapsed after becoming embroiled in the downfall of Enron, to which it was auditor.
Law firm Boies Schiller & Flexner is currently attempting to consolidate all the lawsuits into one case to take to court, the report said.
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First Published: Sun, Aug 23 2009. 06 03 PM IST
More Topics: PwC | Bernard Madoff | Fairfield Sentry | KPMG | Satyam |