Commentary on fraud, scams, scandals, and court cases.

PriceWaterhouseCoopers settles for $8.25 million

The Milwaukee office of PriceWaterhouseCoopers has settled a lawsuit over its audits of two collapsed Heartland Advisors Inc. mutual funds for $8.25 million. A judge will still have to approve the settlement, and that is not expected to happen before April.

The matter came to light in 2000 when Heartland Advisors marked down the value of the funds, the Heartland High-Yield Municipal Bond Fund and the Short Duration High-Yield Municipal Fund. The SEC has estimated that shareholders lost about $80 million.

Attorneys fees and costs will be deducted from the settlement prior to the distribution of funds to the 10,000+ former fund shareholders. The shareholders previously got settlements from Heartland Advisors ($14 million), a bond pricing company ($1 million), and liquidation of the funds’ assets ($30 million).

Officials of Heartland Advisors still face trial on a civil complaint filed by the SEC.

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