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PwC pays $50m over Raytheon

Auditor PricewaterhouseCoopers has agreed to pay $50m (£28m) to settle claims with New York State regarding its role in a 1999 lawsuit involving its defence-contractor client Raytheon.

PwC's settlement follows Raytheon's $410m settlement this month on the same lawsuit, in which shareholders accused the defence firm of hiding financial problems.

Raytheon's stock fell more than 75% between July 1999 and March 2000 after it disclosed a series of charges and sharply lowered its outlook.

In the lawsuit, PwC, Raytheon's auditor, was accused of turning a blind eye to the company's improper accounting practices.

The office of New York State comptroller Alan Hevesi said PwC “issued a clean audit opinion on the company's 1998 statements despite numerous red flags”.

A PwC spokesman said it stood by its work and added: “We recognise in lawsuits of this nature the need to settle to avoid the cost and distractions of protracted litigations. This is an unfortunate reality in today's business environment.”

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