PwC faces $100m lawsuit over audit work
PricewaterhouseCoopers is facing a reported $100m lawsuit over audit work it carried out for San Jose-based HPL Technologies.
Link: PwC put on Burma ‘dirty list’
Trouble for HPL began in July, when the company announced it was investigating accounting irregularities involving now-departed chief executive David Lepejian. The company was later forced to de-list from the Nasdaq technology index on 22 July.
In September Lepejian was charged by the US Securities and Exchange Commission and accused of booking millions of dollars worth of fraudulent sales.
In a statement issued last month the SEC said it had filed a complaint against Lepejian, ‘charging him with fabricating over 80% of the San Jose software company’s reported sales for fiscal 2002’.
The commission alleged Lepejian had created $28m in non-existent sales, ‘causing the company to overstate its revenue for fiscal 2002 by 328%’.
He has also been charged by the SEC with a massive cover-up to conceal the fraud.
PwC said in a statement to AccountancyAge.com: ‘The fraud perpetrated by the HPL CEO has received considerable widespread publicity. As a result and given the current environment it is not surprising that we would be dragged into litigation. However we do not comment on matters that are in litigation.’