PricewaterhouseCoopers (PwC)

SEC Enforcement Actions

February 2, 2008: The SEC barred former PwC partner Robert A. Fish for a year for his role as engagement partner in the audits of Take-Two Interactive Software, which engaged in fraudulent accounting to inflate its revenues in 2000.

January 15, 2008: The SEC charged two PwC employees working for the firm's San Jose office audit group -- William Patrick Borchard and Gregory B. Raben -- for allegedly using their knowledge of potential acquisition plans involving PwC clients to make small yet highly profitable trades before the information was released to the investing public.

September 19, 2007: The SEC barred PwC partner Press C. Southworth from practicing for two years for his role as the lead engagement partner in PwC's audit of National Century Financial Enterprises, Inc., which used noteholders' money to make non-permitted loans.

March 29, 2007: The SEC barred PwC senior associate Amber Schatz from practicing for one year after taking a personal loan from Patterson-UTI's CFO during the firm's 1999 audit of the company.

July 31, 2006: The SEC barred former PwC audit partner Lawrence A. Stoler from engaging in any audits for one year, as a result of his role in the 2000 audits of three hedge funds, including Lipper Holdings, managed by Edward Strafaci.

May, 2006: PwC's Japanese office, Chuo Aoyama PwC was hit with an unprecented two month ban after accounting fraud is uncovered at Kanebo, a cosmetics company. Sam DiPiazza stresses to employees that the audit ban does not apply to any audit work conducted for its foreign clients.

March 3, 2006: The SEC stripped PwC audit partner Andrew J. MacAdams of his right to practice accounting for at least two years as a direct result of his role as audit engagement partner for the firm with airplane parts manufacturer Aerosonic Corporation, whose CEO and CFO used faulty accounting techniques to create fictitious revenues.

February 27, 2006: The SEC barred retired PwC partner Gregory Nelson from practicing for two years as a result of his role as the firm's engagement partner with Sun Communities, Inc., a real estate firm that submitted false financial statements.

August 11, 2004: The SEC barred Gary L. Seidelman, a partner in PwC's Chicago office from practicing for at least three years for his role in flawed audits and interim reviews associated with Anicom, Inc., which engaged in improper earnings management techniques to inflate revenues by over $38 million and net income by over $20 million from the first quarter of 1998 through the first quarter of 2000.

May 11, 2004: The SEC censured PwC for issuing an unqualified opinion in support of Warnaco's FY 1998 annual report and other filings, even though it had significantly misled shareholders. (PwC incorporated the company's misleading description of an earnings restatement into its own audit report.) "By doing so, PwC aided and abetted Warnaco’s violation" of securities laws, according to the SEC. PwC [ttp://www.sec.gov/litigation/litreleases/lr18701.htm agreed] to pay a $2.4 million to settle the matter.

August 13, 2003: The SEC stripped PwC partner Richard Scalzo's right to practice before the SEC after he failed to take certain steps required by generally accepted auditing standards (GAAS) in association with Tyco corporate audits conducted between 1997 and 2001.

August 8, 2003: The SEC [ttp://www.sec.gov/litigation/admin/34-48311.htm barred] PwC partner Warren Martin, the firm's engagement partner with Microstrategy, Inc., from practicing for two years for failing to act with sufficient skepticism and professional care in his client's audit.

May 22, 2003: The SEC censured PwC and fined it $1 million for "improper professional conduct" associated with its audit of SmarTalk's 1997 financial statements. In the case, the SEC alleged that PwC destroyed and altered documents with the knowledge of several top partners. The firm neither admitted or denied wrongdoing as part of the settlement. Separately, Philip G. Hirsch, the PwC partner in charge of the SmarTalk audit agreed to stop practicing before the agency for at least one year. The SEC order said that PwC began destroying papers in late July 1998, shortly after the firm learned about a class-action lawsuit filed against SmarTalk and after Sarbanes-Oxley was passed, requiring auditors to keep work papers for seven years.

July 17, 2002: The SEC fined PwC $5 million for causing both Pinnacle and Avon to commit improper accounting. According to the SEC, "PwC failed to exercise objective and impartial judgment as to the accounting for its own non-audit fees and therefore lacked the requisite independence in the audits and interim reviews in question." In at least the Avon case PwC's consulting fees were classified as capital expenses. (Unlike routine expenses, which are deducted from profits immediately, capital expenses are spread out over time, reducing their impact on the bottom line.)

June 17, 2002: PwC CEO Sam DiPiazza called for the creation of a new three-tier structure for corporate reporting that includes global accounting standards, focused on principles-based, not rules-based reporting standards.

January 14, 1999: The SEC ordered PwC to set aside $2.5 to settle charges associated with Coopers & Lybrand during 1996 to 1998, when the firm and/or some of its partners owned shares of publicly-traded audit clients for which they provided professional services in violation of the rules of independence.