Ernst & Young could face unlimited fine for Equitable Life

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If the Accountants Joint Disciplinary Scheme (JDS) tribunal rules against Ernst & Young for the firms involvement in the Equitable Life affair, the penalties could include an unlimited fine. But the JDS draft report also includes the option of a severe reprimand and the order to pay costs.

The initial report is the culmination of a four year JDS investigation which focussed on the auditors possible negligence in the near-bankruptcy of the life insurance company, which was only saved by a cut in the pensions and retirement savings of its policyholders in 2000.

The initial Treasury report, conducted by Lord Penrose, concluded that Equitable Life had been over-generous in its pay-outs and was thus the author if its own misfortunes. The insurers subsequently lodged a 4 billion claim against the...

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