The UK financial services watchdog has issued a record £15m fine to PwC for failing to report suspected fraud at a collapsed City firm, leaving investors £240m out of pocket. This marks the first FCA fine against an auditor, following a previous penalty from the Financial Reporting Council. The firm, London Capital & Finance, attracted investors with promises of high returns but diverted funds to risky ventures. The collapse in 2019 led to investigations and the recent fine closes the FCA’s scrutiny of the case. PwC staff noted red flags and faced uncooperative behavior from the firm during audits, eventually filing a report but failing to notify regulators. The FSCS and government have compensated some bondholders, while administrators continue efforts to recover funds. PwC settled with the FCA, citing an unintentional breach. The watchdog emphasized the importance of acting on suspicions to provide crucial information. This case highlights the need for transparency and diligence in financial audits to protect investors and uphold regulatory standards.
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