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PNC settles claims for $9 million |
A federal judge approved a $9 million settlement of claims made by PNC Financial Services Group Inc. against accounting giant Ernst & Young International that stemmed from a scandal in which PNC had to restate nearly $155 million in earnings.
The settlement approved Thursday in Pittsburgh essentially wraps up litigation that has resulted in a pool of about $203 million to be distributed to tens of thousands of PNC investors, said Barry Weprin, the lead plaintiffs' attorney.
"This basically is the last piece of a series of settlements that have seven or eight pieces, including private litigation and parts of which are settlements with the government," Weprin said.
The federal Securities and Exchange Commission alleged that PNC tried to conceal $762 million in sour corporate loans and investments in 2001 by selling them to three partnerships. PNC created those partnerships with the American Insurance Group Inc., which developed and marketed the special purpose entities with Ernst & Young.
New York-based AIG agreed in 2004 to pay $126 million in restitution and penalties to SEC and the Justice Department to settle allegations of aiding the flawed accounting by PNC.
Separately, investors also sued PNC, its attorneys, AIG and Ernst & Young, claiming they incurred as much as $1 billion in losses, Weprin said. Defense attorneys had argued the losses were closer to $90 million.
Resources: http://www.businessweek.com/ap/financialnews/D8OF6UG00.htm |
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