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PwC pays $51 million to settle audit fraud lawsuit

PricewaterhouseCoopers has agreed to pay $51 million plus interest to settle a class action lawsuit brought by investors in business software company MicroStrategy who alleged auditing irregularities by the accountants, according to a report by the Washington Post.01 May 2001

The shareholders sued because they said PwC defrauded them when the firm approved an audit of MicroStrategy’s 1999 profit figures. In March 2000, MicroStrategy revised its 1998 and 1999 results, thereby revealing that the company was making a loss, not a profit as the reults previously stated. The following month, the company said the US Securities and Exchange Commission was investigating how it records revenues.

PwC continues to deny any wrongdoing, describing its settlement as “a business decision to settle this case to avoid further costs and the uncertainties of protracted litigation.”

MicroStrategy floated in 1998 with an offer price of $6 per share. Its share price rocketed to $333 in March 2000, but now trades below $5.