Top-tier auditor PwC reaches settlement with U.S. FDIC over bank auditing failure

WASHINGTON, March 15 (Xinhua) -- The U.S. Federal Deposit Insurance Corporation (FDIC) said on Friday that it has reached a 335-million-U.S.-dollar settlement with PricewaterhouseCoopers (PwC), one of the "Big Four" auditors in the world.

In August 2009, an Alabama-based banking giant in the United States named Colonial Bank was closed, which represented one of the largest bank collapses in U.S. history. As the receiver for the collapsed Colonial Bank, the FDIC said that the failed bank cost the Deposit Insurance Fund nearly 2.958 billion dollars.

In 2012, the FDIC sued two auditors, PwC and Crowe Horwath LLP, for failing to catch the massive fraud scheme that led to the collapse of Colonial Bank.

"On December 28, 2017, the United States District Court for the Middle District of Alabama held PwC liable for professional negligence in its audit of Colonial Bank and, on July 2, 2018, the district court awarded damages to the FDIC on its claims," said the FDIC.

At first, the U.S. judge ruled that PwC must pay 625.3 million U.S. dollars in damages. However, the FDIC finally announced a 335-million-dollar settlement on Friday.

Before the settlement with PwC, the FDIC settled professional negligence claims against the other public accounting firm, Crowe Horwath LLP, on April 3, 2018.

In a statement on Friday, PwC confirmed that it had settled the professional negligence claims with the FDIC.

Founded in 1933, the FDIC is an independent agency created by the U.S. Congress during the Great Depression in order to maintain stability and public confidence in the nation's financial system by insuring deposits.