A federal judge in the US has ordered PwC to pay $625.3m (Â£473.2m) in damages to the Federal Deposit Insurance Corp (FDIC) over its failure to detect over $2bn fraud at Alabamaâ€™s Colonial Bank.
The bank collapsed in 2009, becoming the sixth largest bank failure in US history.
As Colonialâ€™s receiver, the FDIC incurred a cost of $2.8bn after the bankâ€™s collapse and brought a negligence claim against the Big Four firm.
In January US District Judge Barbara Rothstein said that as auditors of parent company Colonial BancGroup PwC was negligent and failed to perform adequate checks that could have uncovered the multi-billion-dollar fraud which spanned 2002-2009.
After considering the firmâ€™s liability for damages, on Monday Judge Rothstein said that it was more likely than not that PwCâ€™s negligence was the proximate cause of FDIC damages and therefore ordered them to pay $625.3m.
The court found that PwC did not design its audits to detect fraud, which constituted a violation of auditing standards.
Phil Beck, an attorney for PwC US, told Bloomberg that the firm intended to pursue an appeal, pointing to the courtâ€™s previous findings that â€œnumerous employees at Colonial actively and substantially interfered with our audits.â€�
The fraud involved Colonial Bankâ€™s largest client, mortgage company Taylor, Bean & Whitaker, continually overdrawing its bank account and covering it up by conspiring with some bank employees to fraudulently sell Colonial mortgages that had already been sold.
Both Colonial Bank and Taylor Bean went into bankruptcy in 2009 as the fraud was uncovered.
Several senior executives at the mortgage company and bank were found guilty in the conspiracy were subsequently jailed, and Taylor Beanâ€™s founder and chairman Lee Farkas is currently serving a 30-year sentence.
Meanwhile, in March Taylor Bean Whittakerâ€™s auditor Deloitte was ordered to pay $149.5m (Â£108.4m) by the US Department of Justice.
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