PWC TO PAY $225M IN TYCO SUITCONCORD, N.H. - Big Four firm PricewaterhouseCoopers agreed to pay $225 million to settle a securities and accounting fraud class-action lawsuit brought by Tyco shareholders.
The settlement covers investors who bought or acquired Tyco shares between Dec. 13, 1999, and June 7, 2002, and comes after four years of litigation.
"While PwC was prepared to continue to defend all aspects of its work in the litigation process, the cost of that defense and the size of the securities class action made settlement the sensible choice for the firm," said PwC spokesperson David Nestor. "In addition, PwC values its ongoing business relationships with all of the Tyco entities, and this settlement clears the way for those relationships to continue to grow."
The plaintiffs charged that PwC was in a position to uncover Tyco's fraud when the company overstated its income by $5.8 billion during the period in question.
PCAOB CRITICAL OF GRANT THORNTON AUDITS
WASHINGTON, D.C. - The Public Company Accounting Oversight Board has faulted eight audits performed by global audit firm Grant Thornton, citing departures from generally accepted accounting principles, as well as problems with evaluating financing costs and rental income.
During the eight-month process, the PCAOB said that it conducted inspections at the firm's national office in Chicago, as well as 13 of its field offices. As with all PCAOB inspection reports, the audit clients remained anonymous.
However, in a letter to PCAOB director of inspections George Diacont, Grant Thornton took umbrage at the board's use of descriptions such as "failed to identify" and "failed to perform" appearing in the reports. It also stated that it has enhanced its training programs and developed additional guidance to address problems in previous inspection reports.
Earlier this year, the audit overseer released its inspection reports on Big Four firms Ernst & Young and Deloitte, both of which were cited for audit deficiencies in eight of their clients' audits. The report can be viewed at www.pcaobus.org.
JUDGE BARS 'PATRIOT' GROUP TAX SCHEME
WASHINGTON, D.C. - A Greenville, S.C., federal judge has permanently barred Robert Barnwell Clarkson and his "Patriot Network" from promoting tax fraud schemes. The court found that Clarkson instructed Patriot Network members that they need not file federal income tax returns, and helped members obstruct Internal Revenue Service efforts to collect taxes.
Papers filed in the case showed that Clarkson boasted that he "untaxed" more than 8,000 people over 30 years.
The court detailed Clarkson's efforts at interfering with tax collection, including his instruction to transfer property to nominees and to sue IRS agents who attempt to collect taxes. Clarkson, a disbarred attorney from Anderson, S.C., has twice been convicted of federal tax-related crimes.
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