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November 22, 2022

Judge Didn’t Buy PwC’s Story, Rejects Call for Mistrial

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Judge Victor Marrero rejected PwC’s argument that MF Global’s attorneys were presenting a new theory of causation in their case, dealing the firm a setback in the trial.

PwC claimed that the plaintiffs were conducting a “trial by ambush.” From Reuters:

PwC said 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 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.

PwC wanted Marrero to throw out all the evidence that referenced “confusion” or “lack of trust” and disallow any further evidence of a similar nature. If that wasn’t going to happen, then the firm wanted a mistrial.

Judge Marrero didn’t buy it, writing:

Although PwC may well be surprised that some of the prior allegations in the case may differ from theory of causation the plan administrator has advanced up to this point at trial, because that theory has been disclosed before, PwC cannot at this late stage claim to be prejudiced. The trial was scheduled to last as much as five weeks. PwC’s Motion was filed after the first week and following the testimony of only one MF Global executive. The weeks remaining should afford PwC sufficient time to respond to any shift it perceives in the Plan Administrator’s theory.

PwC’s lawyers are playing it cool, though. Reuters quotes one of the firm’s attorneys, Rich Marooney, as saying that the firm “expects to win at trial ‘regardless of the causation theory.'”

Gotta stay positive, right?

[Reuters, MF Globgal Decision on PwC Misc Motion]

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