FDIC Settles with PricewaterhouseCoopers Over Failed Bank Audits

   By Robert Barba 
 

The Federal Deposit Insurance Corp. said Friday it has reached a $335 million settlement with PricewaterhouseCoopers LLP related to its audits of Colonial Bank, a financial institution that failed in 2009.

In 2012, the FDIC sued PwC and Crowe Horwath LLP for more than $1 billion for failing to catch fraud that led to the failure of Colonial Bank, one of the largest bank collapses during the financial crisis.

In late 2017, the U.S. District Court for the Middle District of Alabama held PwC liable for professional negligence in its audit of the bank. In July, the district court awarded $625.3 million in damages to the FDIC.

PwC said in a statement Friday that it and the FDIC have settled the professional negligence claims to their mutual satisfaction.

Colonial Bank failed in August 2009. At the time of its failure, it had $25.5 billion in assets and its failure cost the Deposit Insurance Fund roughly $2.96 billion, the FDIC said in prepared remarks.

BB&T Corp. took over the operations of Colonial from the FDIC, assuming its roughly $20 billion in deposits. It also bought $22 billion of Colonial's assets, but entered into an agreement with the FDIC to share in potential losses. At the time of its failure, Colonial had 346 branches in Alabama, Florida, Georgia, Nevada and Texas.

Write to Robert Barba at [e-mail]

(END) Dow Jones Newswires

March 15, 2019 13:59 ET (17:59 GMT)

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