The UK Accountancy Actuarial Disciplinary Board has
recommended PwC UK be fined up to £34m ($53m) over the JP
Morgan securities audit, according to the Financial
Times.
At the disciplinary hearing, over PwC’s 2002
to 2008 audits of JP Morgan securities, AADB prosecutors said
the firm’s fine should not be disproportionate to the one received
by JP Morgan last year over the same corporate failure.
JP Morgan was fined £33.3m by the Financial
Services Authority (FSA) over failing to keep client assets and
options businesses in separate accounts.
According to the Financial Times,
PwC’s lawyer argued a reasonable fine should be between £500,000
and £1m as the firm made ‘an honest mistake’ and did not benefit
from it.
Following the disciplinary hearing this week,
an independent tribunal has 15 days to make a final ruling over the
disciplinary action handed to PwC.
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 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.
