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Auditors Face Suit But Not Interest In $2B Bank Failure Row

Law360, New York (July 14, 2017, 10:43 PM EDT) -- An Alabama federal judge ruled Friday that auditors PricewaterhouseCoopers LLP and Crowe Horwath LLP must face a $2.2 billion lawsuit by regulators who say the watchdog overlooked a mortgage fraud scheme that brought down Colonial BancGroup Inc., but said the damages are too complicated to apply interest.

Colonial’s bankruptcy trustee and the Federal Deposit Insurance Corp. say the auditors failed for years to detect irregularities and phony collateral put up by its biggest customer, Taylor Bean & Whitaker Mortgage Corp. The auditors asked the court to...
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