A federal judge has rejected PricewaterhouseCoopers LLP's bid to sharply restrict how the bankruptcy plan administrator for Jon Corzine's defunct brokerage MF Global Holdings Ltd pursues its $3 billion malpractice case against the auditor, Reuters reported yesterday. Ruling eight days after the trial began, U.S. District Judge Victor Marrero in Manhattan refused to force the administrator, which is seeking money for MF Global creditors, to stick to what PwC called its original theory of why MF Global went bankrupt on Oct. 31, 2011. PwC said that the administrator has in three years of litigation blamed the bankruptcy on a $6.3 billion European sovereign debt wager that the futures and commodities brokerage would not have made but for its negligent accounting advice. But PwC said that it was blindsided when the administrator at trial began blaming confusion and a lack of trust among customers, investors and lenders in MF Global's financial statements, which in turn were caused by PwC's advice. The auditor sought to exclude all evidence supporting that theory, including testimony from Corzine, or get a mistrial. But the judge said the administrator had blamed PwC before for the loss of confidence in MF Global, including during its lawyer's March 7 opening statement.
