MF Global filed for bankruptcy after clients became worried about its $6.3bn (£4.2bn) exposure on European sovereign debt, credit rating downgrades, margin calls and news that money from customer accounts was used to cover liquidity shortfalls.

The lawsuit alleged that PwC did not highlight the lack of internal controls at the company, which was run by Jon Corzine, a former New Jersey governor and ex-Goldman Sachs co-chairman.

PwC denied any wrongdoing. The settlement, which is subject to court approval, was reached after the two sides went through a mediation process presided over by a former federal judge, according to court documents.

It resolves a class action where the lead plaintiffs were the Virginia Retirement System and the Province of Alberta, Canada. They claimed that in 2010 and 2011 PwC ‘falsely certified’ that it had properly audited MF Global's financials and internal controls, and also alleged that the firm ‘knew about or recklessly disregarded’ problems that led to the brokerage filing for bankruptcy in October 2011.

In a statement, a US PwC spokeswoman said: ‘PwC is pleased to resolve this matter and avoid the cost and distraction of prolonged securities litigation. The firm stands behind its audit work and its opinions on MF Global's financial statements.’

Following the bankruptcy, about $1.6bn (£1bn) in customer funds was found to be missing, although customers have been repaid. MF Global has also agreed to pay £200m (£134m) in civil fines.

PwC was paid more than $23m (£15m) in fees for auditing and other services provided to MF Global in 2010 and 2011, according to court documents.

This recent settlement is separate from a $1bn (£670m) lawsuit filed by MF Global's bankruptcy plan administrator in 2014 which is still pending. In this case, the administrator has accused PwC of professional malpractice, and claims that bad accounting advice helped caused MF Global’s collapse.