PwC Goes for $8.25M Settlement in Fund Collapse Case

January 4, 2006 ( - Accounting firm PricewaterhouseCoopers (PwC) has agreed to settle a class-action lawsuit over how it audited two collapsed mutual funds.

The Associated Press reported that an attorney for investors in the funds, C. Oliver Burt III, said the settlement was for $8.25 million.

PricewaterhouseCoopers was the accounting firm for Milwaukee-based Heartland Advisors Inc. in 2000 when the investment firm marked down the value of the two funds (See  SEC Charges Firm Mispriced Two Junk Bond Funds ). The US Securities and Exchange Commission (SEC) has estimated fund shareholders lost about $80 million.   The lawsuit was the subject of a trial that was scheduled to have gone to a jury Tuesday.

“Given the uncertain outcome of litigation we made a business decision to settle the case for a fraction of the original claim without admitting any liability,” Pricewaterhouse spokesman Steven Silber said, according to the AP.

US District Judge J.P. Stadtmueller must approve the settlement, which is not expected to occur before April.

Heartland already settled the case for $14 million, and a company that provided prices for some of the funds’ bonds paid $1 million. Shareholders received about $30 million when the funds’ assets were liquidated. Heartland officials still face trial on a civil complaint by the SEC.