PwC to face MF Global lawsuit

Gavel Jason Morrison

A federal judge on Wednesday ordered PricewaterhouseCoopers to face a $1bn lawsuit claiming that its bad accounting advice was a substantial cause of the October 2011 bankruptcy of MF Global, a brokerage run by former New Jersey Governor Jon Corzine.

Reuters reports the U.S. District Judge Victor Marrero in Manhattan said PwC's advice on 'repurchase-to-maturity' transactions through which Corzine bought $6.3 billion of European sovereign debt affected how MF Global implemented its strategy and in turn contributed to its alleged losses.

'This line of causation gives rise to a plausible claim that PwC proximately caused harm to MF Global,' Marrero wrote.

MF Global's bankruptcy plan administrator sued PwC on March 28, accusing it of professional malpractice for having provided 'flatly erroneous' accounting advice to the company. Corzine is not a defendant.

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PwC must face $1 billion lawsuit over MF Global advice

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