Professional services firm Ernst & Young have been fined £500,000 and reprimanded by the joint disciplinary tribunal (JDT) over their role in the near collapse of insurance company Equitable Life ten years ago.
Ernst & Young, the former auditors of Equitable Life, paid the fine imposed by the policing body for the accountancy industry, along with £2.4 million in costs.
This latest fine comes after Ernst & Young appealed against a harsher ruling made against them in 2008, when the firm and partner Kevin McNamara were fined £4.2 million and ordered to pay £5.75 million in costs.
The ruling in the 2008 professional indemnity case -where E & Y were found guilty of over 20 instances of what the court called “a lack of professional competence” and “a lack of objectivity and independence” when auditing Equitable Life in 1997- 99 – has now been overturned following the appeal, resulting in the smaller fine.
Whilst E & Y have said that they “…regard these matters – a decade on – as now closed.”, the Equitable Members Action Group is displeased with the ruling, calling it “little more than a slap on the wrist for E&Y”.
In a separate case, it has been reported that Ernst and Young may also be facing further legal action over their role in the collapse of Lehman Brothers in 2008.