BANKING

Aide Says Keating Misled Auditors: Former American Continental President Judy Wischer testified that Charles H. Keating Jr. misled independent auditors about transactions that produced millions of dollars of profit for the company’s Lincoln Savings & Loan unit. In Keating’s federal criminal fraud and racketeering trial, Wischer said that she, Keating and other executives didn’t tell the Arthur Young & Co. accounting firm about inducements given to prospective buyers or about secret promises, including ones to buy back properties later. Had the information been revealed, she said, it would have “significantly” altered the glowing reports that Arthur Young had made on the financial conditions of the Irvine thrift and the Phoenix parent company. Her testimony, the first from a major insider, supports what three major accounting firms had contended since Keating’s empire collapsed in April, 1989. Arthur Young, now Ernst & Young, and two other firms paid tens of millions of dollars earlier this year to settle claims from American Continental investors.