A federal judge on Wednesday ordered PricewaterhouseCoopers to face a $1 billion lawsuit claiming that its bad accounting advice was a substantial cause of the October 2011 bankruptcy of MF Global Holdings Ltd., a brokerage run by former New Jersey Gov. Jon Corzine, Reuters reported yesterday. U.S. District Judge Victor Marrero said that PwC's advice on "repurchase-to-maturity" transactions through which Corzine bought $6.3 billion of European sovereign debt affected how MF Global implemented its strategy and in turn contributed to its alleged losses. MF Global's bankruptcy plan administrator sued PwC on March 28, accusing it of professional malpractice for having provided "flatly erroneous" accounting advice to the company. Corzine is not a defendant. Judge Marrero noted that factors such as how MF Global employees implemented Corzine's strategy might also have been major causes of the New York-based company's losses but he said a jury should sort out who was liable. The judge did dismiss breach of contract and unjust enrichment claims against PwC. The case is MF Global Holdings Ltd as Plan Administrator v. PricewaterhouseCoopers LLP, U.S. District Court, Southern District of New York, No. 14-02197.
