Auditors of the oil company at the heart of the “car wash” corruption scandal that has rocked Brazil agreed a $50 million settlement with Britain’s biggest pension fund. PricewaterhouseCoopers Auditores Independentes, (the Brazilian arm of PricewaterhousCoopers”, the auditors of Brazil’s state-controlled oil company, Petroleo Brasiliero SA (Petrobas), agreed the $50 million deal with Universities Superannuation Scheme.

Record settlement

Following the $2.95 billion partial settlement agreed with Petrobras in January, to end the class action brought by investors who claim their share-values fell as a result of the corruption scandal, it brings the total amount recovered for the investors to $3bn. A statement from the lawyers for the investors, New York headquartered securities litigation firm Pomerantz, said that if it is approved, the deal would represent the largest ever settlement in a class action involving a foreign investor and the largest securities class action settlement in a decade. 

Car was scandal

The settlement came after nearly three years of litigation, arising from the investigation into alleged kickbacks paid over a decade by contractors to former Petrobas executives in return for public contracts. The scandal embroiled not only Petrobras' former executives but Brazilian politicians, including former presidents and at least one-third of the Brazilian Congress. Petrobras has denied wrongdoing and claimed it has been the victim of misconduct by former executives.

Accountability

Jeremy Lieberman, co-managing partner of Pomerantz, said: “We are very pleased with the $50 million settlement achieved with PwC Brazil.  With allegations of such an extended and pervasive fraud at Petrobras, it is particularly important to look at the role of auditors and other gatekeepers to ensure that a blind eye is not turned to corporate malfeasance. He said the settlement ensures “accountability for those gatekeepers whose duty it is to protect the interests of shareholders, not their corporate clients”. Cleary Gottlieb represented Petrobras and Skadden represented the underwriter defendants.