PracticeAccounting FirmsFresh crisis for E&Y

Fresh crisis for E&Y

Ernst & Young's month from hell continued this week after the head of its Swiss firm left amid allegations of insider trading.

Link: M&A partner cull at Ernst & Young

E&Y was quick to distance itself from Marcel Maglock, chief executive of its Switzerland business, and issued a statement saying: ‘The charges do not involve any audit clients of the firm and E&Y is cooperating fully with the investigation.’

The news follows last week’s High Court decision, which gave DaimlerChrysler permission to sue the firm for £300m in connection with fraud at truckmaker ERF.

ERF was bought by German manufacturer Man in January 2000, but the group soon discovered that the company was facing a liquidity crisis.

As a result it sued DaimlerChrysler, which bought the original owner of ERF, Western Star, in 2000.

In turn DaimlerChrysler is suing E&Y, Western Star’s auditor at the time.

Stephen Ellis, the financial controller at ERF, who has now been dismissed, issued a statement admitting details of the accounting irregularities in which he was involved. Man refused to comment on the statement.

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