In other items: Former Walt Disney Co. board member Roy E. Disney urged shareholders this week to reject a proposal asking the company to forever reserve one seat on the board for a Disney heir; and U.S. dollar reached a new low against the euro in European trading, hitting $1.3548 in extremely light holiday trading...
HINSDALE, Ill. — Auditor Ernst & Young has agreed to pay $125 million to the Federal Deposit Insurance Corp. over the collapse of a suburban Chicago bank three years ago, the FDIC announced yesterday.
Superior Bank FSB’s failure cost the FDIC about $700 million at the time, making it then one of the largest federally insured financial institutions to fail in a decade.
Investigators for the Treasury Department, FDIC and Congress blamed risky business strategies by Superior’s management for the collapse, but they also cited failures on the part of Superior’s outside auditing firm, Ernst & Young. The FDIC accused the auditing firm of negligence and concealing the bank’s true financial condition.
Under the agreement announced yesterday, Ernst & Young did not admit any liability.
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Ernst & Young spokesman Charles Perkins said the firm had already made changes to its auditing practices, including adding more technical resources and increasing its training and experience requirements.
Protected status for Walt Disney family member?
After waging an often bitter campaign for change at The Walt Disney Co., former board member Roy E. Disney urged shareholders this week to reject a proposal asking the company to forever reserve one seat on the board for a Disney heir.
The shareholder proposal, which would name a Disney family member as an outside, independent director, was made by Frank Wierenga, a Pennsylvania shareholder. It will appear in the company’s proxy statement and be voted on at next year’s annual shareholders meeting.
This week, Roy E. Disney, son of company co-founder Roy O. Disney and Walt’s nephew, posted a letter to shareholders on his Web site urging defeat of the proposal.
“While we wholeheartedly concur with Mr. Wierenga that the Disney board should include committed, vigilant directors who share Walt’s vision, we also believe that, in the interest of good corporate governance, no one should have the right to a seat on the board merely because of his or her last name.”
The company’s management also recommended that shareholders reject the proposal because it contradicts corporate-governance guidelines adopted by the board.
Dollar falls further against the euro
The U.S. dollar reached a new low against the euro in European trading, hitting $1.3548 in extremely light holiday trading with most European foreign-exchange markets closed.
Analysts expect the euro to end the year at about the $1.35 level — which the euro broke for the first time Thursday — but with activity so thin, small trades can send the currencies careening.
The 12-nation euro fell against the dollar after its 1999 debut, but it has risen more than 60 percent since bottoming out at 82 U.S. cents in October 2000. It has risen particularly sharply since September, when it traded for around $1.20, over concerns about U.S. trade and budget deficits. With no solution to those problems in sight, some analysts predict a euro level of $1.40 or higher by the end of 2005.
Compiled from The Associated Press