PwC Can't Shed Claims It Missed Colonial Bank Fraud

Law360, New York (September 9, 2014, 8:00 PM EDT) -- An Alabama federal judge on Tuesday declined to throw out a lawsuit brought by the trustee for defunct Colonial BancGroup Inc. accusing PricewaterhouseCoopers LLP and Crowe Horwath LLP of failing to properly audit the failed bank, finding questions of fact persist in the case.

U.S. District Judge W. Keith Watkins held that breach of contract claims against the auditors can't be tossed on a motion to dismiss the action, since Colonial has adequately alleged its performance under contracts with the accounting firms. The auditors had claimed that fraud perpetrated by Colonial employees, which contributed to the bank's downfall, demonstrates that Colonial...

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