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.