Accounting firm makes payments related to bank failure

Northwestern Financial Review, Jan 15-Jan 31, 2005

Ernst & Young has agreed to pay $125 million to the FDIC over its role in the failure of Superior Bank in Hinsdale, Ill., three years ago. The FDIC paid about $700 million to handle the failure of the suburban Chicago institution. Ernst & Young was the outside auditor for the $2.3 billion bank. The FDIC accused the big accounting firm of concealing the bank's true financial condition, although Ernst & Young is not admitting any fault or liability.

Ernst & Young is paying a $40 million claim from the FDIC and an $85 million claim from the Office of Thrift Supervision, which closed Superior Bank in July of 2001. The FDIC received the money for both claims.