High angle view of mallet eyeglasses legal book in courtroom

The U.S. Federal Deposit Insurance Corp. (FDIC) announced that it has reached a US$335 million settlement with PricewaterhouseCoopers LLP (PwC) over its audits of a bank that failed almost a decade ago. The settlement involves claims of “professional negligence” brought by the FDIC against PwC stemming from its audits of Alabama-based Colonial Bank, which failed in August 2009.

The bank collapsed after it was revealed that it had acquired hundreds of millions of dollars worth of fraudulent mortgages. In 2011, a former Colonial Bank executive was sentenced to eight years in prison after she pled guilty to one count of conspiracy to commit bank, wire, and securities fraud.

The FDIC reports that a U.S. district court “held PwC liable for professional negligence in its audit of Colonial Bank” and that the court subsequently awarded damages to the FDIC on its claims.

The bank’s failure cost the federal deposit insurance fund almost US$3 billion. Last year, the FDIC also settled professional negligence claims against Crowe Horwath LLP for US$60 million, stemming from its internal audits of Colonial Bank.