A UK watchdog has fined PwC UK £1.4m ($2.17m)
over the firm’s handling of JP Morgan securities audit.
The UK Accountancy Actuarial Disciplinary
Board (AADB) said PwC failed to provide “sufficient appropriate
evidence” that JPMorgan Securities complied with client money rules
from 2002 to 2008.
The AADB ruling said that PwC failed to notice
JP Morgan had placed as much as $8.5bn of client funds into
incorrect bank accounts over a seven-year period.
PwC have accepted the fine and taken steps to
ensure the oversight will not occur again.
“We regret that one aspect of our work on the
private client money report to the FSA fell beneath our usual high
standards,” PwC stated.
“When the issue was identified, and before any
complaint had arisen, we took action to ensure that staff received
additional training in the client monies area.”
JP Morgan, who alerted the regulator of the
mistake in 2009, was fined £33.3m by the FSA over failing to keep
client assets and options businesses in separate accounts.
The watchdog said PwC’s misconduct in this
case was “very serious” and imposed the record fine, which was
reduced from £2m.
The AADB has a separate investigation into PwC
and whether the firm’s reports on client assets at Barclays Capital
Securities were compliant with financial rules. PwC has vigorously
defended its work in this instance.
