TOP AUDITOR PricewaterhouseCoopers (PwC) has been fined a record £1.4 million in Britain for wrongly telling local regulators for seven years that JPMorgan Securities was keeping client money safe.

The case brought by the Accountancy and Actuarial Discipline Board (AADB) was the latest sign regulators have been taking a harder line on auditors, seen by policymakers as being too soft on banks in the run-up to the financial crisis.

The regulator said PwC, one of the world’s so-called “Big Four” auditors which check the books of nearly all blue-chip companies, admitted it failed to obtain “sufficient appropriate evidence” to report JPMorgan Securities complied with strict client money rules over several years. Most of the client money from futures and options trading was being “swept” daily into interest-bearing, unsegregated accounts overnight at JPMorgan Chase bank, the firm’s parent, the AADB, said.

In June 2010, Britain’s Financial Services Authority slapped a record £33.3 million fine on JPMorgan Securities for failing to keep client money separate from its own money over a seven-year period to July 2009. – (Reuters)