The Securities and Exchange has censured Ernst & Young, ordering the Big Four firm to pay $1.6 million to settle charges of compromising its independence and contributing to faulty accounting by a client in 2001.As part of the settlement, E&Y neither admitted nor denied the agency’s allegations, made in connection with the firm’s audit work for Pittsburgh-based regional bank PNC Financial Services Group.
E&Y first confirmed that the SEC was investigating its work for PNC in late 2004, when the agency questioned a financial product that the firm was hired to create for PNC by insurer American International Group Inc. At the time, the SEC said that the financing vehicle allowed PNC to move $762 million in bad loans and investments off its balance sheet in 2001.
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