Former customers of MF Global have added accounting firm PricewaterhouseCoopers (PwC) as a defendant in a lawsuit stemming from the collapse of the brokerage.
The group, which is working with MF Global Inc. Trustee James Giddens, already had filed allegations including violations of the Commodity Exchange Act, breach of fiduciary duty, and negligence, among other causes of action against former CEO Jon Corzine and other former MF Global executives as well as CME Group, MF Global’s designated self-regulatory organization.
In the amended complaint, filed in U.S. District Court in Manhattan on Monday, the group accuses PwC of failing to adequately audit MF Global’s internal controls over customer funds. The lawsuit, which is seeking class action status, claims that PwC failed to examine MF Global’s controls over customer funds. As such, this amounted to professional malpractice and a breach of the auditor’s duties to the company and the customers, the lawsuit said.
According to a PwC spokeswoman, it conducted its last audit of MF Global in March 2011. The audit confirmed that MF Global had maintained its customer accounts in accordance with federal regulations, at the time, she said.
PwC had served as independent auditor of MF Global in 2010 and 2011, according to the complaint. “If PwC had properly executed its duties and evaluated and reported on [MF Global]’s control problems in March 2011, there would have been ample time for management to institute proper controls over customer funds,” the complaint says.
The case is DeAngelis et al v. Corzine et al, U.S. District Court, Southern District of New York, No. 11-07866, and is seeking in excess of $1 billion in missing funds following MF Global’s collapse.