PricewaterhouseCoopers to Settle Brokerage Audit Allegations for $1 Million
August 02 2017 - 2:41PM
Dow Jones News
By Michael Rapoport
Accounting firm PricewaterhouseCoopers LLP agreed Wednesday to
pay $1 million to settle a regulator's allegations that its audit
of Bank of America Corp.'s Merrill Lynch brokerage had been
inadequate.
PwC's 2014 audit of Merrill had failed to find that the
brokerage improperly left billions of dollars in customer assets
exposed to creditors' claims, said the Public Company Accounting
Oversight Board, which regulates the auditing industry.
Broker-dealers are required to hold certain customer securities
in separate, safeguarded accounts to protect them from the claims
of creditors if the brokerage failed. But Merrill failed to do so
for several years, putting customer assets at risk and violating
customer-protection rules, the Securities and Exchange Commission
said when it settled with BofA over the matter last year.
PwC reported that Merrill had complied with the rules but didn't
obtain sufficient evidence to support that contention, the PCAOB
said.
"Investors should not have to worry that their brokers' auditors
are failing to perform appropriate work in examining the safeguards
around their funds," said Claudius Modesti, the PCAOB's director of
enforcement and investigations, in a statement.
No Merrill customers actually suffered any losses.
In a statement, PwC said it was "pleased to have resolved the
matter." The firm didn't admit or deny wrongdoing in agreeing to
the settlement.
BofA paid a $415 million settlement to the SEC over the
customer-protection issues in June 2016. A spokesman for the bank
declined to comment on the PwC settlement.
Write to Michael Rapoport at Michael.Rapoport@wsj.com
(END) Dow Jones Newswires
August 02, 2017 15:26 ET (19:26 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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