“And the Academy Award for Best Picture goes to La La Land! Uh, wait a minute, not La La Land, Moonlight! The Best Picture award goes to Moonlight. Sorry, La La Land.”
Whoops! Somebody from PricewaterhouseCoopers gave the wrong envelope to presenter Warren Beatty, co-presenter Faye Dunaway read out the wrong name, and the wrong actors and filmmakers took the stage to accept an award that wasn't meant for them – only to be told moments later on live television that a mistake had been made and they had to turn over their golden statues to the rightful recipients.
It was a horrible mistake, but it was an accident, and PcW acknowledged their error, apologized profusely, and endured countless jests at their expense afterward. Now, however, they face the prospect of being held responsible, and financially liable, for someone else's intentional fraud.
The Federal Deposit Insurance Corp. is suing PcW in federal court for money the FDIC lost when Colonial Bank of Alabama failed eight years ago in the aftermath of a $2.5 billion fraud perpetrated against it by the head of its mortgage lending department, Catherine Kissick, who was working in cahoots with the chairman of Colonial's biggest mortgage banking customer, Taylor, Bean & Whitaker.
The FDIC wants to hold PcW responsible for failing to detect the fraud that preceded the bank's failure. PcW did fail to detect the fraud, but so did two other outside accounting firms, as well as state and federal regulators, including the FDIC itself.
But the FDIC wants its money back, and it's not going to get it from a couple of defunct financial institutions like Colonial Bank and Taylor, Bean & Whitaker. PcW, on the other hand, is still alive and kicking. It's the only one in the running to receive the blame that has to go to someone.
Don't be surprised when the judge opens up the envelope and announces that the award for prize patsy goes to PricewaterhouseCoopers.
