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PONZI SCHEME CASE SETTLES PRE-ARGUMENT The California Supreme Court on Wednesday decided not to review a case in which accounting giant PricewaterhouseCoopers stood accused of aiding an illegal Ponzi scheme. The court’s unanimous decision was based on a request by both sides following a settlement at the trial court level. PricewaterhouseCoopers had been accused by Grafton Partners and Allied Capital Partners of breaching a contract in 2002 by not informing them that a fund in which all three had invested was involved in an illegal Ponzi scheme. A third company, Six Sigma, and a class of investors who held limited partnerships in Grafton and Allied, joined the suit later. An Alameda County Superior Court judge threw out the new parties in 2003. But San Francisco’s First District Court of Appeal reinstated them late last year, saying there was a triable issue of material fact. The high court granted review in March. According to Alameda County Superior Court records, PwC settled the case by agreeing to pay $39.5 million. Bartko, Zankel, Tarrant & Miller partner John Bartko, who represented the investors, said all parties “were pleased” with the outcome. He also said the settlement was final on Sept. 5.

Mike McKee

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