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Browse: Home / 2009 / June / 17 / Michigan Announces $109 Million Settlement With E&Y in HealthSouth Class Action

Michigan Announces $109 Million Settlement With E&Y in HealthSouth Class Action

By Securities Docket on June 17, 2009, 3:22 pm

On Monday, Michigan Attorney General Mike Cox and Treasurer Robert Kleine announced a $109 million settlement with Ernst & Young resulting from audits the firm conducted that allegedly failed to expose massive fraud taking place when E&Y served as HealthSouth Corporation’s auditing firm. According to Cox, “the settlement is one of the largest ever obtained against an outside auditor in a class-action securities fraud case and will benefit the State of Michigan’s pension fund and members of the class action against Ernst & Young.”

The class action case alleged accounting errors and irregularities against E&Y, including overstating financial statements and failing to conduct audits that were in compliance to generally accepted auditing standards for HealthSouth. In 2006, the Attorney General announced a $445 million settlement with HealthSouth as a result of the fraud and losses to pensioners and investors nationwide.

Read the Michigan Attorney General’s announcement

Posted in Class Actions | Tagged Auditors, Settlements

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