SEC Fines Pricewaterhouse Coopers $5M in Pinnacle and Avon Violations

MIAMI-In the harshest punishment of an accounting firm this year following the Arthur Andersen scandal, the Securities and Exchange Commission has fined PricewaterhouseCoopers LLP (PwC) and its broker-dealer affiliate, PricewaterhouseCoopers Securities LLC $5 million for violations of the auditor independence rules.

The London-based firm neither admitted nor denied wrongdoing in the settlement which involved Sarasota, FL-based Pinnacle Holdings Inc., a national cell phone-site developer, and Avon Products Inc. of New York, according to a prepared statement from the SEC.

The SEC complaint charges the accounting firm helped Pinnacle set up $24 million in improper reserves of which Pinnacle capitalized $8.5 million in costs, including $6.8 million in fees paid to PricewaterhouseCoopers for consulting and other non-audit services that should have been booked as expenses.