UK regulators have slapped
PricewaterhouseCoopers (PwC) with a record £1.4m ($2.2m) fine
relating to inaccurate reports on private client accounts at JP
Morgan Securities Ltd (JPMSL).
The UK Accountancy and Actuarial Discipline
Board (AADB) tribunal found that PwC was guilty of “very serious”
misconduct after it failed to report on inappropriate ring fencing
of client money between 2002-2009 at JPMSL.
Go deeper with GlobalData
False reports
The AADB said that they had issued the fine,
the biggest ever for an auditor in Britain, because PwC had falsely
reported that JPMSL was in compliance with client money rules.
These rules require that client money is at
all times held separately from the firm’s money.
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By GlobalDataBetween Novermber 2002 and July 2009, JPMSL
did not ensure that client money was held at all times in
segregated accounts, the AADB said in their agreed statement of
facts.
In June 2010, the FSA fined JPMSL £33m for
failing to keep client money separate from the firm’s money in
segregated accounts.
PwC admit guilt
In a statement, PwC admitted culpability and
said it regretted that the firm’s work on the private client money
reports to the FSA fell short of expected standards.
The fine issued to PwC was reduced from
£2m.
