PwC settled their case with MF Global mid trial. Andrew Wilson of Pwc said the following:

The case was settled to the mutual satisfaction of both parties.

This is interesting considering that the judge in the case previously gave the parties time to come to terms before the trial started. Both said that they had no interest in settling. MF Global wanted $3 billion in damages and PwC didn’t want to pay anything in damages.

Related:

PwC Back in Court Over MF Global, EY Indonesia Fined

 

PwC believed that it was MF Global’s business practices that led the firm to its downfall. MF Global and Jon Corzine said that it was the trust that was put into PwC that led to the downfall. Jon Corzine was the former head of MF Global. He was also the former Governor of New Jersey.

MF Global and Corzine said that the public put trust into PwC, and that is why the losses were more than they should have been.

What changed since both parties said they weren’t willing to settle? I think PwC wanted some certainty, and the MF Global trustee just wanted to walk away with a win. PwC also did not want to take a chance in a jury trial because of their huge slip-up at the Oscars. There is no doubt that it was in the back of their mind that some jurors watched the Oscars and could have some bias.

What if some jurors wanted to pay PwC back for embarrassing Moonlight by slipping pwc the guilty envelope.

Related:

PwC Fails at the 2017 Oscars #Envelopegate

PwC Oscars Fiasco Impacts MF Global Lawsuit

PwC Partners Receive Threats Over 2017 Oscars Mistake

 

PwC has had a terrible year as far as perception goes. This is their second huge settlement in just under a year. They recently settled the Taylor Bean lawsuit. Taylor Bean was suing PwC for $5 billion in that case.

If you are keeping track, that is 3 huge reputation damaging events that happened for PwC this year. More specifically, those 3 events all occurred at the US arm of the firm. This next year is going to be a tough year for Tim Ryan. He is going to have to work on the firms reputation for many reasons.

First their perception is terrible because of multiple multi-billion dollar cases going on at once. Second he is going to have to try to undo the damages done by the firm’s Oscar screw-up. If Tim Ryan doesn’t clean up the firm’s image in the next year, I think there is a chance that his role might be handed to someone else. He has tried things like having honest discussions about diversity etc., but those are only a blip on the radar compared to these huge damaging events.

He has to work on improving their image quickly because PwC is going to start losing recruits to other firms. Nobody wants to go work for the firm that can’t get it right. They can’t get their audits right, and they can’t get the Oscars right.

Additionally, if their image doesn’t improve, Pricewaterhousecoopers will also start losing clients. Clients don’t want to award work to a firm with a bad reputation. That bad reputation is contagious as far as clients are concerned.

If clients start bailing on the firm, then it is only a matter of time before partners leave the firm as well.

Now you can see why it is important that PwC settled this case and moves on to rebuilding its damaged reputation. We will measure this impact to PwC based on their fiscal year next year. We will have to see how their revenues are impacted, the number of staff that they hire, the number of staff that they lose and the number of partners that they lose.

Related:

PwC Revenue 2016