London: PricewaterhouseCoopers (PwC) failed to properly report on JPMorgan Chase's compliance with UK rules to protect client money, Britain's accounting regulator said following a 10-month probe.
An independent tribunal will decide on any sanctions after considering a formal complaint filed by the Financial Reporting Council, the watchdog said yesterday in a statement on its website. The company cooperated in the probe, according to the regulator.
"PwC did not carry out its professional work in relation to these reports with due skill, care and diligence and with proper regard for the applicable technical and professional standards expected of it," the regulator said.
The FRC opened an investigation in October 2010 into reports by PwC's London unit covering JPMorgan's observance of the Financial Services Authority's client-asset rules, which are intended to segregate customer assets from those of the company to protect them during a liquidation.
A similar probe of Ernst & Young covered reports it did for Lehman Brothers Holdings's UK-based European unit.
"It is naturally a matter of regret that, in respect of one aspect of our work, we did not meet our normal high standards," a PwC spokesman said in an e-mailed statement on Monday.
