PwC set for court showdown over claims it negligently failed to spot a a £122m ‘Ponzi scheme’
PwC is braced for a £25million court battle over claims it negligently failed to spot a Guernsey ‘Ponzi scheme’.
The big four auditor tried to have the proceedings thrown out but its attempts failed.
PwC is being sued for negligence, breach of duty and breach of contract by the administrators of Providence Investment Fund, which collapsed four years ago owing investors more than £40million.
Big four auditor PwC is being sued for negligence, breach of duty and breach of contract by the administrators of Providence Investment Fund, which collapsed four years ago
The fund’s administrators claim it was run as a ‘fraudulent Ponzi scheme’ and that PwC, which gave Providence’s books a clean bill of health in 2013 and 2014, should have sounded the alarm.
Providence claimed to invest money in the Brazilian debt market but instead most of investors’ cash was fraudulently funnelled into other parts of the group or companies controlled by its boss, Antonio Buzaneli.
He was jailed for 20 years in the US in 2019 for orchestrating a £122million Ponzi scheme, which prosecutors said ‘targeted hundreds of victims worldwide, many of whom were elderly and vulnerable’.
PwC tried to quash the claim against it, saying that administrators could not prove any of Providence’s directors had relied on its audits or that they would have acted differently if the fraud had been discovered, the Financial Times reported.
But a judge at Guernsey’s Royal Court threw out the auditor’s appeal.
A spokesman for PwC said: ‘We believe this claim is misconceived and will continue to robustly defend our position.’