Report: NJ renews lawsuit against Ernst &Young

AP News
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Posted: Oct 11, 2011 6:15 PM
Report: NJ renews lawsuit against Ernst &Young

New Jersey officials have reportedly renewed their lawsuit against accounting giant Ernst & Young.

The Wall Street Journal said Tuesday that the state filed its amended suit in federal court on Friday. It claims the firm helped Lehman Brothers disguise its true financial condition while bank officials were asking the state's pension-fund manager to invest in Lehman stock and securities.

The newspaper says the state's investment division eventually put $385 million into Lehman Brothers before it collapsed. The state lost more than $192 million on the investment, and in its suit claims Ernst & Young, Lehman's independent auditor, made misstatements in July 2008 about Lehman's compliance with accounting rules.

Ernst & Young spokesman Charlie Perkins told the newspaper that the firm always acted properly.