Two PricewaterhouseCoopers divisions agreed to pay $55 million to victims of Bernard Madoff’s Ponzi scheme who invested through feeder funds.
PwC Canada and PwC Netherlands were the last remaining defendants in a seven-year case brought in part by Fort Lauderdale attorneys from Boies, Schiller & Flexner. The proposed settlement filed Wednesday in New York federal court would bring the plaintiffs’ recovery to at least $235 million.
“In a case where we faced significant legal hurdles to any recovery at all, this is an exceptional result for the plaintiffs,” lead plaintiffs’ counsel David Barrett and Stuart Singer of Boies Schiller said in a joint statement.
The investors alleged PwC was negligent in auditing Madoff feeder funds managed by Fairfield Sentry in a case set for trial Monday. The settlement does not include any admission of wrongdoing by Fairfield’s auditor.
The proposed settlement reached Nov. 25 in mediation led by Layn Phillips of Phillips ADR in Corona Del Mar, California, awaits approval by U.S. District Judge Victor Marrero in the Southern District of New York. Negotiations included four full-day meetings and two half-day meetings conducted over a three-year period.
In November, Marrero approved a $125 million settlement with the financial services company Citco Group Ltd. Another defendant, Fairfield Greenwich Group, settled in 2012 for $80 million. GlobeOp Financial Services LLC settled in 2013 for $10 million.
Investor attorneys have not yet filed a request for fees and costs. Over the course of the litigation, the attorneys reviewed more than 9 million documents and conducted nearly 80 depositions, including 19 with PwC representatives.
PwC is no stranger to large settlements. In 2007, the international company agreed to pay $225 million to Tyco International Ltd. investors, who alleged PwC had been negligent as an auditor by not uncovering securities fraud.
The accounting giant also paid about $70 million to investors in an Australian shopping mall company in 2012. The company almost collapsed, which investors blamed partially on accounting errors.
Representatives of PwC Canada and PwC Netherlands did not respond to requests for comment by deadline.
The plaintiffs lawyers in this case include Boies Schiller attorneys Singer, Eli Glasser, Sashi Bach and Carlos Sires in Fort Lauderdale and Barrett and Howard Vickery in New York; Robert C. Finkel of Wolf Popper in New York; and Christopher Lovell and Victor E. Stewart of Lovell Stewart Halebian Jacobson in New York.
PwC is represented by Kirkland & Ellis attorneys Andrew Genser, George Bauer and Mindy Yu in New York and Matthew Buckley, Amy Crawford, Brenton Rogers, Emily Nicklin and Timothy Duffy in Chicago, as well as William Maguire, Sarah Cave and Gabrielle Marshall of Hughes Hubbard & Reed in New York.