Continental Illinois’ audit firm has been cleared.
A federal court jury in Chicago found the Ernst & Whinney accounting firm innocent of failing to warn bank officials of bad loans bought from Penn Square Bank that nearly bankrupted the company. The lawsuit pitted the Federal Deposit Insurance Corp. and certain shareholders against the bank’s former auditing firm. The FDIC, in seeking $180 million, argued in the four-month trial that Ernst & Whinney failed to warn senior officers of Continental Illinois that the bank was heading for trouble because of questionable energy loans. “We were confident that the jury would find as it did,” Ray Groves, chairman of Ernst & Whinney, said in a statement.
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