PracticeConsultingEquitable takes legal advice over E&Y

Equitable takes legal advice over E&Y

Embattled life insurer Equitable Life has appointed City law firm Herbert Smith to sue its former advisers and executives, including ex-auditors Ernst & Young.

The law firm has been asked to see if the insurer could take legal action against those involved in the crisis over guaranteed annuity rates, and has the former auditor firmly in its sights.

Herbert Smith will also investigate the role played by the Financial Services Authority, the Department of Trade & Industry and Equitable’s former executives who resigned over the crisis.

The move came after the House of Commons Treasury Select Committee slammed the auditing arrangements at Equitable.

Ernst & Young quit as auditor last month, saying that it did so ‘in order to help its client move forward’.

Equitable confirmed the move saying a number of member groups had pushed for the insurer to take action.

Equitable’s spokesman said: ‘If there was any realistic chance of redress from any third party then we would pursue them.’

A spokesman for Ernst & Young said: ‘We do not believe there are any grounds for a legal claim and continue to believe the accounts were prepared properly.’

Links

Treasury committee slams Equitable audit.

Select committee slams Equitable audit

E&Y to quit as Equitable Life auditor

PwC picks up Equitable Life audit

E&Y spared grilling over Equitable collapse.

Equitable hunts for new finance chief

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