PwC UK will face a disciplinary hearing over
its 2002 to 2008 audits of JP Morgan, following an Accountancy and
Actuarial Discipline Board (AADB) investigation.

The hearing, which will be held on 28 November
2011, will take place due to AABD allegations that PwC’s audits of
the investment bank ‘lacked due skill, care and
diligence’.

The AABD began its investigation in September
2010 and found PwC did not report that client money held by JP
Morgan’s futures and options business was not segregated at all
times in line with the FSA’s Client Asset rules in force at that
time.

PwC was JP Morgan’s main auditor and
responsible for producing the bank’s client asset returns report as
required by the FSA to ensure customer fund protection.

PwC allegedly failed to notice JP Morgan had
placed as much as £16bn ($26bn) of client funds into incorrect bank
accounts over a seven-year period between 2002 and 2009. In 2010,
the FSA fined the investment bank £33.3m for breaching rules
governing segregation of client money.