The Strategist

PwC fined $ 625.5 million in connection with Colonial Bank’s bankruptcy

07/03/2018 - 14:51

The audit company PwC is obliged to pay compensation in the amount of $ 625.5 million in connection with the bankruptcy of Colonial Bank from Alabama in 2009, according to a ruling of the US District Court.

HowardLake via flickr
HowardLake via flickr
PwC auditors were accused of overlooking the largest US mortgage fraud scheme involving the bank and Taylor, Bean & Whitaker (TBW), one of the leading mortgage underwriters in the US. PwC was the auditor of Colonial BancGroup, the parent company of Colonial Bank, in 2002-2008.

For several years, TBW had exceeded the loan in the bank to cover the lack of own funds. In exchange, the company sold mortgage bonds to Colonial Bank, which had already been sold to other investors. PwC did not find these violations.

The prosecutor was the Federal Deposit Insurance Corporation (FDIC), which suffered losses in the amount of about $ 3 billion in connection with the bankruptcy of Colonial Bank.

PwC is the world's largest company specializing in providing services to businesses, including audit. Its revenue in the last financial year, which ended in June 2017, was $ 37.7 billion.