UPDATE 1-UK watchdog drops probe into PwC work for Barclays Capital

Fri Dec 6, 2013 5:49am EST

LONDON Dec 6 (Reuters) - Britain's accounting watchdog said on Friday it had dropped its investigation into PwC's preparation of compliance reports for Barclays Capital Securities.

Barclays was fined 1.1 million pounds in January 2011 for failing to segregate customer money over a period of eight years and the Financial Reporting Council opened a probe into the bank's auditor PwC at the end of 2011.

The investigation covered PwC's reports for the Financial Services Authority on how Barclays Capital Securities was complying with FSA rules on protecting client money from Dec. 1 2001 to Dec. 29, 2009.

The FRC said in a statement there was no realistic prospect that an independent tribunal would back the watchdog.

"Consequently, no further action will be taken and the case will be closed," the FRC said in a statement.

PwC, one of the world's "Big Four" accounting firms, said it had cooperated fully with the FRC and was pleased the investigation was now closed.

"This confirms our view that there was no case to answer," PwC said in a statement.

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