An historic Australian securities class action settlement was announced today, as Centro shareholders settled their case against the company and its auditor, PricewaterhouseCoopers, for $200 million. The amount of $200 million represents the largest Australian securities class action settlement in history, surpassing the $144 million settlement in the Aristocrat case in 2008.

According to Business Day, PwC is likely to pay about one third of the total settlement amount, and the entity that now owns all of Centro's assets will pay the remainder of the money. Back in 2009, lawyers representing Centro shareholders in the case successfully moved to add claims against auditing firm PwC to their lawsuit. The lawyers stated at the time that “we think that [PwC] are responsible for a substantial amount of loss incurred by our claimants. Our investigations indicate their conduct fell well short of that you would expect from a large audit firm.” The claims against PwC included allegations that PwC:

engaged in false, misleading or deceptive conduct in relation to the June 2007 accounts of Centro and its listed offshoot Centro Retail;

made representations to Centro about its disclosure obligations that were false, misleading or deceptive; and

made misleading and deceptive statements via PwC Securities in a product disclosure statement in relation to a merger of Centro Retail and another Centro entity, Centro Shopping America fund.

Australian law firms Maurice Blackburn and Slater & Gordon represent the Centro shareholders. Australian litigation funder IMF backed the lawsuit, and will receive a significant percentage of the settlement.

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