PracticeAccounting FirmsE&Y faces lawsuit over failed client

E&Y faces lawsuit over failed client

Big four firm Ernst & Young is being sued by US government agency the Federal Deposit Insurance Corporation for $548m (£350m) over its audit work at failed financial institution, Superior Bank.

Link: E&Y drops appeal case

The FDIC, a major US banking regulator is suing the firm in connection with allegedly misstated accounts of Superior Bank and for also allegedly deliberately delaying reporting the error.

Ernst & Young, issued a statement defending itself.

‘Clearly, Superior Bank’s failure was not caused by any action of ours and we intend to vigorously defend claims against the firm,’ it said.

Superior Bank collapsed last year after making large losses from risky home loans to borrowers with poor credit records.

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