E&Y Settles Largest Suit Since Early '90s
Remember just a few years ago when some of the large accounting firms had to pay dearly for suits brought against them for savings & loan debacles? Hard to believe it was only the early '90s.
Times have changed ... but perhaps they haven't in the minds of key offers at Ernst & Young. Now, E&Y must pay $335 million to Cendant Corporation shareholders over allegations that E&Y's audits contributed to false earnings reported to shareholders of CUC International, which was a predecessor to Cendant when CUC merged with HFS in 1997 to form Cendant.
On Dec. 7, Cendant agreed pay shareholders $2.83 billion to settle claims from the inflated earnings.
E&Y is fighting the ruling, claiming that did not err in any audit prcedures.