Ernst & Young has been fined half a million pounds and ordered to pay £2.4m in costs by the Accountant's Joint Disciplinary Scheme (JDS) and Appeal Tribunal following an investigation into its audit of Equitable Life.
Both former Ernst & Young partner Kevin Paul McNamara and the firm were reprimanded by the Appeal Tribunal.
The decision is the result of a six-year investigation into the auditors' possible negligence in the near-bankruptcy of the life insurance company Equitable Life, which was only saved by a cut in the pensions and retirement savings of its policyholders in 2000.
Ernst & Young was accused of failing to qualify accounts between 1997 and 1999, which did not include adequate provisions to cover outstanding Guaranteed Annuity Rate (GAR) policies. The i...