PricewaterhouseCoopers sued by client Emcore

Emcore Corp. (Somerset, NJ) has filed a multimillion-dollar lawsuit in federal court against its former auditor PricewaterhouseCoopers LLP (PwC; New York, NY). The suit, charging fraud and negligence under the Racketeer Influenced Corrupt Organization (RICO) law, alleges that the accounting firm cost Emcore millions of dollars because the firm's partners owned shares in Emcore, a violation of federal Security and Exchange Commission rules. The suit says PwC CEO James Schiro and eight other partners owned approximately 140,000 shares of Emcore during the period when PwC was conducting the 1998 audit of Emcore. Emcore was planning a stock offering to raise $75 million, but because of the conflict had to delay the offering for three months while another firm performed a new audit. That delay, combined with a dumping of stock owned by PwC, cost Emcore substantial money, the company charges. PwC said the suit was without merit.