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Mattel Board, PwC Face New Investor Claims Over Accounting Error

May 18, 2021, 6:14 PM

A Mattel Inc. investor filed suit in Delaware, claiming its board looked the other way while senior management conspired with PricewaterhouseCoopers LLP to cover up a financial reporting error that understated its third quarter 2017 losses by $109 million.

After a mistake caused by “glaring internal controls deficiencies” that “were not a secret at Mattel,” the company’s leaders and PwC auditors fabricated an offsetting loss in the next quarter to avoid admitting accounting weaknesses that they saw as a potential “kiss of death,” the lawsuit says.

The board, meanwhile, “participated in the fraud by consciously disregarding their duties to implement ...