Chicago (Nov. 4, 2002) The Federal Deposit Insurance Corp. has filed a $548 million fraud and negligence suit against Big Four firm Ernst & Young in connection with last year's failure of Oakbrook Terrace, Ill.-based Superior Bank.

The suit charges that E&Y misstated the thrift's assets and delayed reporting the irregularity to avoid botching the sale of its consulting arm to Cap Gemini. In July 2001, federal regulators seized control of Superior. The suit charges that the cost to the FDIC was $750 million.

In a statement, E&Y said it intends to defend the suit and attributed the thrift's collapse to its heavily weighted portfolio of risky sub-prime loans and frequent declines in interest rates.

-- Electronic Accountant Newswire staff

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