Fifteen million pounds. This is the amount of the fine imposed on the PricewaterhouseCoopers (PwC) group by the British Financial Markets Authority (FCA), its first ever issued against an audit firm.
The markets regulator explains that PwC has been confronted with “many difficulties” during an audit of the London Capital & Finance (LCF) fund, whose employees provided the audit firm with “incorrect and misleading information”. PwC suspected the existence of fraudulent activities but did not report them to the FCA. “as fast as possible”as required by regulations.
Therese Chambers, co-director general of markets supervision at the FCA, recalls in the press release that “Auditors have a central role to play in ensuring that” market activities are free from fraud. “They have privileged access to information and are required to report suspected fraud to the FCA.”she adds.
The collapse of London Capital & Finance (LCF) in 2019 was one of the most high-profile scandals in the City of London in recent years. LCF, set up in 2012, sold mini-bonds promising a very attractive return of 6.5% to 8% per year. In total, nearly 12,000 people had invested £237m in the fund at the time of its collapse.
The FCA itself was heavily criticised at the time when it was led by Andrew Bailey, the current governor of the Bank of England, for failing to act in time after being warned of the problems with LCF several years earlier.
Source: Lemonde
