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IN BRIEF / ACCOUNTING

Ernst & Young to Pay $125 Million to FDIC

December 25, 2004|From Associated Press

Accounting firm Ernst & Young agreed to pay $125 million to the Federal Deposit Insurance Corp. over the collapse of a Chicago bank three years ago, the FDIC said.

Superior Bank FSB's failure cost the FDIC about $700 million, making it one of the largest federally insured financial institutions to fail in a decade.

Investigators for the Treasury Department, the FDIC and Congress blamed risky business strategies by Superior's management for the collapse, but they also cited failures on the part of Superior's auditing firm, Ernst & Young. The FDIC accused the firm of negligence and concealing the bank's true financial conditions.

Under its agreement with regulators, Ernst & Young did not admit any liability.

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