FDIC Fires Back At PwC's Bid To Dodge $1B Negligence Suit

Law360, New York (April 8, 2013, 8:33 PM EDT) -- The Federal Deposit Insurance Corp. on Monday pushed back against PricewaterhouseCoopers LLP's bid to toss the FDIC's suit over Colonial Bank's $1 billion loss in the Taylor Bean & Whitaker Mortgage Corp. mortgage fraud scheme, saying the auditor's interpretation of the U.S. Supreme Court's O'Melveny & Myers decision is faulty.

The FDIC told an Alabama federal judge that the high court's ruling in O'Melveny & Myers v. FDIC clearly holds that state law, not federal law, determines whether the FDIC, as receiver, enjoys special protection from imputation-based defenses.

However, PwC contends that, according to O'Melveny, federal law determines whether the FDIC...

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