PricewaterhouseCoopers — hired and paid by the banks it examines — has now landed in the regulatory spotlight for obscuring some of the same misconduct it was supposed to unearth, the New York Times reported today. New York State’s financial regulator is poised to announce a settlement with PricewaterhouseCoopers, taking aim at the consulting firm for watering down a report about one of the world’s biggest banks, Bank of Tokyo-Mitsubishi UFJ. The regulator, Benjamin M. Lawsky, will impose a $25 million penalty against PricewaterhouseCoopers and prevent one of its consulting units from taking on certain assignments from New York-regulated banks for two years, a reputational blow that could cause some banking clients to leave. The firm, which is accused of lacking the objectivity and integrity expected of consultants but not actually breaking the law, agreed to pay the fine and accept the two-year sidelining of its regulatory consulting unit. PricewaterhouseCoopers appeared to have had little choice: Lawsky’s office, which has the authority under a little-known New York law to censure erring consultants even without a legal violation, threatened to otherwise inflict a more sweeping and lengthy prohibition.
