FDIC Settles with PricewaterhouseCoopers Over Failed Bank Audits
March 15 2019 - 02:14PM
Dow Jones News
By Robert Barba
The Federal Deposit Insurance Corp. said Friday it has reached a
$335 million settlement with PricewaterhouseCoopers LLP related to
its audits of Colonial Bank, a financial institution that failed in
2009.
In 2012, the FDIC sued PwC and Crowe Horwath LLP for more than
$1 billion for failing to catch fraud that led to the failure of
Colonial Bank, one of the largest bank collapses during the
financial crisis.
In late 2017, the U.S. District Court for the Middle District of
Alabama held PwC liable for professional negligence in its audit of
the bank. In July, the district court awarded $625.3 million in
damages to the FDIC.
PwC said in a statement Friday that it and the FDIC have settled
the professional negligence claims to their mutual
satisfaction.
Colonial Bank failed in August 2009. At the time of its failure,
it had $25.5 billion in assets and its failure cost the Deposit
Insurance Fund roughly $2.96 billion, the FDIC said in prepared
remarks.
BB&T Corp. took over the operations of Colonial from the
FDIC, assuming its roughly $20 billion in deposits. It also bought
$22 billion of Colonial's assets, but entered into an agreement
with the FDIC to share in potential losses. At the time of its
failure, Colonial had 346 branches in Alabama, Florida, Georgia,
Nevada and Texas.
Write to Robert Barba at robert.barba@wsj.com
(END) Dow Jones Newswires
March 15, 2019 13:59 ET (17:59 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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