Bank Overseer PwC Faces Penalty and Sidelining of Regulatory Consulting Unit [DealBook]
Ben Lawsky lays into PwC for whitewashing a report that outlined illegal wire transfers to Iran and other sanctioned countries: "New York State’s financial regulator is poised to announce a settlement with PricewaterhouseCoopers, according to the interviews, 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."
PwC’s Report, Before and After [DealBook]
The Time highlights specific changes that the Bank of Tokyo-Mitsubishi's lawyers and executives pressured PwC into making: "The first draft included two paragraphs excerpted from the bank’s operational manual that outlined “Special Instructions” for employees to strip out names of Iranian clients. The bank returned the draft of the report to PricewaterhouseCoopers with those paragraphs crossed out." Also, this: "The first draft cautioned that some wire transfers contained special characters like pound signs and commas, which may have circumvented PricewaterhouseCoopers’ filters for illicit transactions. That warning does not appear in the version submitted to regulators."
PwC to pay NY $25 million over work with Bank of Tokyo-Mitsubishi [Reuters]
PwC's head of advisory, Miles Everson, insists this is nothing to be concerned about: "This matter relates to a single engagement completed more than six years ago in which PwC searched for and identified relevant transactions that were self-reported to regulators by PwC's client. PwC's detailed report also disclosed the relevant facts that PwC learned subsequent to its search process," he said in statement.
Holding Auditors Blameless [NYT]
Oddly (or maybe not-so oddly), the NYT Editorial Board ran this piece on Friday, criticizing auditors: "The big auditing firms are virtually never the first to uncover and publicly report financial frauds; credit for that goes to the press, whistle-blowers, hedge funds, independent research firms, bankruptcy trustees or regulators. With each failure by auditors to sound warnings, it becomes increasingly clear that the investing public is being shortchanged when it comes to the reliable information it needs to make sound investing decisions." The editorial also calls for audit fees to be paid by public entity rather than the companies being audited as well as the audit partner to sign the opinion.
Audit tenders to double [economia]
PwC expects 56 of the FTSE 350 to put their audits out for bid in 2014, breaking down: "there have been 17 completed tenders, 14 are currently in progress, 7 are in the 'pipeline' and 18 are 'expected.' "
Square Posts List of Its Top Ten Insecurities [ValleyWag]
Issuing a press release Square debunking "myths" about your company is not a good PR move.
They work for about an hour and then take a break for about 20 minutes.
Woman Cited for Climbing into Zoo's Giraffe Pen [AP]