PNC Settlement May Be Near

Some 73,000 PNC Financial Services Group shareholders may soon share in the settlement of their class-action lawsuit against the bank. The shareholder restitution fund already amounts to $156.4 million. The acting trustee of the fund, Louis Fryman, said the fund will not be distributed until and unless U.S. District Judge David S. Cercone approves a not-yet-approved additional $36.6 million bringing the fund total to $193 million.


Click Here
Cougar Mountain has all the features of the high-end accounting products at an affordable price. Fully integrated modules including our award-winning Point of Sale product mean you only enter data once - saving time and ensuring accuracy. Cougar Mountain is the answer for small to mid-sized businesses that have outgrown their initial accounting package.
Learn more!

Cougar Mountain Home Cougar Mountain Accounting
Sign up for a Web Demo Cougar Mountain Point of Sale
Request a Call Cougar Mountain FUND

PNC inflated its 2001 earnings by transferring some $762 million in bad corporate loans to three partnerships that it created with the insurance company AIG. In removing these loans from their balance sheet, the bank did not need to book the depreciation on these loans for the second, third, and fourth quarters of 2001 allowing the bank to misrepresent its results.

Shareholder overvalue was realized when the Federal Reserve forced the bank to restate its 2001 annual results to the tune of $155 million under the initial numbers. Shareholders who bought stock between July 19, 2001 and July 18, 2002 are members of the class for which the class-action suit was by Pittsburgh attorney Alfred Yates Jr. in July 2002. The suit contends the bank misrepresented itself to investors.

PNC paid $25 million to the U.S. Department of Justice to settle conspiracy to commit securities fraud charges in June 2003. They also required PNC to set up the $90 million restitution fund as a term of its criminal settlement of the charges. $27 million of that amount was covered by insurance. Earnings will not be affected by the payment.

There is a shareholder suit pending for Ernst & Young, PNC’s former auditing firm according to court filings. The Big Four accounting firm reviewed the 2001 loan transactions and did not put up any red flags.

Buchanan Ingersoll, a Pittsburgh law firm advised PNC on the 2001 loan transactions. Shareholders are planning to sue the company. The restitution fund will receive $1.9 million from the firm.

AIG will pay $4 million into the restitution fund. AIG will also pay over $40 million into the fund. AIG earned these fees in the 2001 loan transactions from PNC.

You may like these other stories...

Here's a CPA who truly walks the walk. On March 15, Frank Ryan, CPA, departed San Diego, California, with plans to be in Ocean City, Maryland, by July 2 to teach a course at the Maryland Association of CPAs’ (MACPA...
When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.  The "Big Eight" were still headquartered in Boston. Vietnam War...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.