New York, NY: (Apr-12-07) An investor class action lawsuit filed against PNC Financial Services Group Inc. and its auditors Ernst & Young LLP, accused them of fraudulent accounting practices, which led to 22,000 PNC investors losing money. The five-year-old litigation stemmed from the Pittsburgh bank's alleged hiding of bad loans. American International Group Inc., the big insurer, helped PNC's ICLC Corp. unit in 2001 fraudulently move $762 million of soured loans and investments off its balance sheet, boosting profit by $155 million. Ernst was accused of helping AIG develop an accounting product to enable PNC's transfers, and then advising the bank, an audit client, on how to account for a version of it. Ernst settled a US Securities and Exchange Commission probe into the matter, agreeing to a $1.59 million penalty bringing its total payout to $9.08 million. PNC agreed to pay $115 million to settle charges with the US Department of Justice, and entered a deferred prosecution agreement. AIG agreed to pay $126 million to resolve probes by the DOJ and the SEC. [BUSINESS INSURANCE: ERNST & YOUNG SETTLEMENT]
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