FDIC seeks $548 million judgement against Ernst & Young

Citing professional negligence and accounting malpractice, the FDIC is seeking a judgement of $548 million in compensatory damages, punitive damages in an amount three times the compensatory damages, interest and costs against Ernst & Young LLP.

In the action filed in the U.S. District Court for the Northern District of Illinois, the FDIC charged that the actions taken by Ernst & Young resulted in the failure of Superior Bank, FSB, Hinsdale, Ill.

The legal action reports that the accounting firm finally admitted to the FDIC that its annual financial audits of the failed thrift were erroneous, requiring a $270 million reduction in assets. Further investigation …