An independent disciplinary tribunal will
consider whether PwC should be sanctioned over its JP Morgan
Securities Limited (JP Morgan) audits for reporting periods between
2001 and 2008, following an Accountancy & Actuarial Discipline
Board (AADB) investigation.
The AABD alleged PwC’s audits of the
investment bank ‘lacked due skill, care and diligence’.
The investigation, which began last in
September 2010, found PwC did not report that client money held by
JP Morgan’s futures and options business was not segregated at all
times in accordance 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.
