MF Global and PwC settle lawsuit alleging negligence
NEW YORK — The trial between bankrupt brokerage MF Global, run by former New Jersey Gov. Jon Corzine, and its former accounting firm, PwC, came to an unceremonious end on Thursday, with both parties saying they have reached a settlement.
Terms of the settlement were not disclosed. MF Global had been suing PwC for as much as $3 billion.
“The case was settled to the mutual satisfaction of the parties,” PwC spokesman Andrew Wilson said.
MF Global sued PwC, also known as PricewaterhouseCoopers, alleging that negligence by the firm’s accountants led to confusion about the financial health of MF Global at a time of global market turmoil. That confusion eventually led MF Global to file for bankruptcy in late 2011.
PwC alleged that MF Global’s business decisions, including its purchase of European government bonds, were the reason MF Global failed — not because PwC did not account for those assets as MF Global says they should have.
The trial, in the U.S. District Court of the Southern District of New York, was supposed to last five weeks. The settlement came before PwC’s lawyers were even able to call witnesses to its defense.
Corzine testified earlier this month, saying that the European bonds that MF Global invested in were relatively low-risk and the firm expected to get its money back. All of the bonds were from countries with investment-grade ratings, and at the time, the European Central Bank created a $500 billion facility to help eurozone countries meet their obligations.